Paramount made a hostile bid for Warner after Netflix deal. What happens next?
Subscribe to enjoy similar stories. Paramount on Monday made a $77.9 billion hostile takeover bid for Warner Bros. Discovery, escalating its fight for the entertainment company against Netflix by bringing its case directly to Warner shareholders.
Netflix on Friday agreed to buy Warner Bros. for $72 billion after Warner splits its studios and HBO Max streaming business from its cable networks. The announcement sent shock waves across Hollywood and Wall Street alike, as many had anticipated that David Ellison’s Paramount had the upper hand.
With Ellison’s tender offer launched Monday, here’s what to know about how the drama could play out: A tender offer makes a direct appeal to shareholders to sell, or “tender," their shares at a set price. They are often employed when the target company’s board won’t engage. Paramount on Monday accused Warner of not meaningfully engaging with any of its six takeover proposals made over the past 12 weeks.
Tender offers give shareholders a deadline for participating that can often be extended. Warner’s shareholders have until Jan. 8 to decide whether to accept Paramount’s $30 a share all-cash bid, unless the deadline is extended.
If a tender offer looks like it has widespread support, boards of the company being sold tend to capitulate and negotiate a deal before the deadline. Warner has said it is reviewing Paramount’s offer and meanwhile continues to recommend that shareholders support its deal with Netflix, which they will get to vote on at a later date. The Netflix deal is worth $27.75 a share and includes a small portion of Netflix shares as consideration.
Read on livemint.com