Warner Bros Rejects Paramount's Low-Ball Takeover Bid
Warner Bros Discovery turns down Paramount Skydance's $20/share takeover offer. Paramount considers raising bid or going directly to shareholders for the media merger deal.
The Rejected Offer: Warner Bros Discovery (WBD) has turned down (PSKY) Paramount Skydance's initial takeover bid of around $20 per share, which the company deemed too low for consideration.
Current Market Position: Warner Bros shares closed at $17.10 on Friday, giving it a market value of $42.3 billion, significantly larger than Paramount's $18.6 billion valuation at $17 per share.
Paramount's Next Moves: The company has several options including raising its offer, approaching Warner Bros shareholders directly, or securing additional funding through financial partners like Apollo Global Management (APO).
Leadership Perspectives: David Ellison, son of billionaire Larry Ellison, took control of Paramount in August after an $8 billion Skydance Media merger and argues for more industry consolidation to boost streaming subscriptions.
Warner Bros' Strategic Plans: The company plans to split into two separate businesses next year—one for cable TV networks and another for streaming and studios, with most debt going to the cable division.
Negotiating Leverage: CEO David Zaslav believes separated streaming and studio assets will command premium valuations, strengthening Warner Bros' position to demand higher offers from potential buyers.
Industry Analysis: Bloomberg analysts suggest Paramount needs this deal more urgently given its smaller scale and unclear strategic direction in the competitive streaming landscape.