Warner Bros Discovery at Crossroads: Paramount's Takeover vs. Netflix's Bid

Warner Bros Discovery's board may soon reject Paramount Skydance's $108.4 billion takeover offer, opting instead for Netflix's bid. Paramount argues its $30-a-share proposal is superior and more likely to secure regulatory approval. Meanwhile, Affinity Partners exits the financial battle, leaving future ownership uncertain.

Warner Bros Discovery's board is poised to make a pivotal decision regarding Paramount Skydance's $108.4 billion takeover bid as early as Wednesday. According to sources with insider knowledge, the board will likely advise shareholders to reject the offer in favor of recommitting to Netflix's existing proposal. This strategic choice highlights the ongoing competition over valuable assets, including Warner Bros' renowned film studio and its extensive film and TV archive.

These assets contain a treasure trove of content, with classics like 'Casablanca' and 'Citizen Kane,' as well as contemporary favorites like 'Harry Potter' and 'Friends.' The eventual victor in this acquisition race will gain a significant edge in the streaming wars by securing a vast content library. Netflix's earlier success with a $27 billion cash-and-stock bid for Warner Bros' non-cable assets places it in a strong position.

However, Paramount, led by CEO David Ellison, has not backed down. The company directly approached Warner Bros' shareholders with a compelling $30-a-share, all-cash bid, claiming superiority over Netflix's offer. Its financing, comprised of $41 billion in new equity backed by the Ellison family and RedBird Capital, alongside $54 billion in debt from major banks, reinforces its commitment. Meanwhile, Jared Kushner's Affinity Partners, once a financier for Paramount, is withdrawing from the fray, adding further intrigue to the unfolding drama.

(With inputs from agencies.)