Paramount Skydance is escalating its pursuit of Warner Bros. Discovery (WBD), urging the company’s board to accept its $23.50-per-share acquisition proposal, which it argues offers superior value to shareholders, reported CNBC, citing sources.
The move comes as WBD explores a range of strategic options, including splitting into two entities or selling assets, with a formal update expected by mid-December.
Paramount makes its case for acquisition
According to the report, Paramount has sent multiple letters to Warner Bros. Discovery’s board outlining why its proposal represents a better outcome for shareholders than a planned corporate breakup.
Copies of two such letters, reviewed by CNBC, indicate that Paramount believes its bid provides “superior value” compared with any alternative restructuring scenario.
A letter dated October 13 stated that Paramount’s $23.50-per-share offer — composed of 80% cash and 20% equity — delivers higher value than WBD’s internal projections.
The proposal represents an 87% premium to Warner Bros. Discovery’s closing price of $12.54 on September 10, the day before reports emerged of Paramount’s interest.
In response, Warner Bros. Discovery initiated a “comprehensive review of strategic alternatives” aimed at unlocking shareholder value.
The media conglomerate, led by CEO David Zaslav, is weighing whether to split into two separate companies — a streaming and studios unit, Warner Bros., and a global networks division, Discovery Global — or to sell all or part of the business.
The company has already announced plans to separate into the two divisions by April 2026 through a tax-free transaction, which could potentially make future sales of one or both entities more efficient.
Paramount weighs a hostile bid
Warner Bros. Discovery has reportedly rejected three takeover proposals from Paramount to date.
While Paramount remains open to friendly discussions, sources suggest it may pursue a hostile tender offer directly to shareholders if WBD’s board refuses to engage.
Paramount has declined to sign a non-disclosure agreement proposed by WBD, which includes a standstill clause preventing any hostile bid.
The move signals that Paramount intends to keep all options open as negotiations continue.
If Paramount opts for a direct shareholder appeal, it plans to argue that its offer provides far greater immediate value than the company’s breakup strategy, which it estimates could be worth less than $20 per share even under optimistic conditions.
The company’s October 13 letter, signed by Paramount Skydance Chairman and CEO David Ellison, challenged WBD’s projections, noting that even if Warner Bros. outperforms forecasts and trades at Disney-like multiples, the implied valuation still falls short of Paramount’s cash-backed offer.
Potential buyers and regulatory landscape
Comcast and Netflix have also expressed interest in WBD’s studio and streaming assets, with Comcast President Mike Cavanagh calling such an acquisition “complementary” to NBCUniversal’s portfolio.
However, Paramount argues that its full-company acquisition would be better positioned to gain regulatory approval, citing favorable remarks by President Donald Trump about Ellison and his leadership.
Trump has publicly criticized Comcast’s CEO Brian Roberts, further suggesting potential political headwinds for a Comcast deal.
Despite these developments, analysts note that shareholder sentiment remains uncertain.
WBD’s Discovery Global faces steep declines in advertising and cable revenue, while Warner Bros. and HBO Max could still command a significant premium if multiple bidders emerge.
Even so, Paramount’s potential hostile bid is far from guaranteed success.
Only 20% of WBD shareholders with holdings of at least a year are needed to call a special meeting to oppose such a move, a hurdle that may complicate Paramount’s path to acquisition.
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