Warner Bros asks investors to reject takeover bid from Paramount Skydance
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Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.NEW YORK (AP) — Warner Bros. is telling shareholders to reject a takeover bid from Paramount Skydance, saying that a rival bid from Netflix will be better for customers.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.“The Board reviewed Paramount Skydance’s most recent unsolicited tender offer with the same care and discipline it has applied throughout this process, including its review of multiple prior proposals,” Warner Bros. said Wednesday. “The Board’s evaluation followed a thorough and consistent process and is grounded in its fiduciary duties.”Paramount went hostile with its bid last week, asking shareholders to reject the deal with Netflix favored by the board of Warner Bros.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Paramount is offering $30 per Warner share to Netflix’s $27.75.Paramount’s bid isn’t off the table altogether. While Wednesday’s letter to shareholders means Paramount’s is not the offer favored by the board at Warner Bros., shareholders can still decide to tender their shares in favor of Paramount’s offer for the entire company — including cable stalwarts CNN and Discovery.Unlike Paramount’s bid, the offer from Netflix does not include buying the cable operations of Warner Bros. An acquisition by Netflix, if approved by regulators and shareholders, will close only after Warner completes its previously announced separation of its cable operations.Paramount has claimed it made six different bids that Warner leadership rejected before announcing its deal with Netflix on Dec. 5. Only after that did it take its offer directly to Warner’s shareholders.Beyond a greenlight from shareholders, both takeover bids face tremendous regulatory scrutiny. A change in ownership at Warner would drastically reshape the entertainment and media industry _ impacting movie making, consumer streaming platforms and, in Paramount’s case, the news landscape.Critics of Netflix’s deal say that combining the massive streaming company with Warner’s HBO Max would give it overwhelming market dominance, whereas the Paramount+ streaming service is far smaller.“This is something that we’ve heard for a long time_including when we started the streaming business,” Netflix co-CEOs Greg Peters and Ted Sarandos said in a filing through Warner Bros. “Our stance then and now is the same_we see this as a win for the entertainment industry, not the end of it.”Bids from both Netflix and Paramount have raised alarm for what they could mean for film and TV production. While Netflix has agreed to uphold Paramount’s contractual obligations for theatrical releases, critics have pointed to its past business model and reliance on online releases. Yet Paramount and Warner Bros. are two of the “big five” legacy studios left in Hollywood today.Paramount’s attempt to buy Warner’s cable networks and news business would also bring CBS and CNN under the same roof. In addition to further accelerating media consolidation, that could raise questions about shifts in editorial control — as seen at CBS News both leading up to and following Skydance’s $8 billion purchase of Paramount, which it completed in August.Paramount Skydance did not immediately respond to a request for comment from The Associated Press early Wednesday.U.S.
President Donald Trump has already been vocal about his future involvement in the deal, indicating that politics will play a role in regulatory approval.Trump previously said that Netflix’s deal “could be a problem” because of the potential for an outsized control of the market. The Republican president also has a close relationship with Oracle’s billionaire founder Larry Ellison — the father of Paramount’s CEO, whose family trust is also heavily backing the company’s bid to buy Warner.Affinity Partners, an investment firm run by Trump’s son-in-law Jared Kushner, previously said it would investing in the Paramount deal, too. But on Tuesday, the firm announced that it would be dropping out of the bid.Still, Trump also has a tendency to make decisions based on gut and his personal mood. He has continued to publicly lash out at Paramount over editorial decisions at CBS’ “60 Minutes.”“For those people that think I am close with the new owners of CBS, please understand that 60 Minutes has treated me far worse since the so-called “takeover,” than they have ever treated me before,” Trump wrote on his platform Truth Social on Tuesday. “If they are friends, I’d hate to see my enemies!”Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.