In the end, it came down to 75 cents a share – and that means this ain’t over.
On Thursday morning, Warner Bros Discovery received a $30-a-share, all-cash takeover bid for the media giant from Paramount Skydance, sources told The Post. Meanwhile, Netflix offered to buy WBD’s Warner Bros. studio and HBO Max streaming business in a deal that effectively values the whole company at $30.75.
The race looked like a squeaker, but WBD’s board and its CEO David Zaslav announced less than 24 hours later that they had accepted the bid from Netflix. Suffice it to say, Paramount Skydance’s owners – Hollywood mogul David Ellison and his billionaire father Larry Ellison – aren’t happy.
The Ellisons, in fact, are livid – and they are now angling for a counterattack, I am told. They also believe they can win this battle by taking their case directly to WBD shareholders, according to three people with direct knowledge of the matter.
“They are really pissed over at Paramount Skydance,” said a media executive with direct knowledge of the matter. “They think this was a rigged deal process because of the friendship between the CEOs and they’re betting the shareholders will be pissed when they find out what went down.”
Those CEOs would be Zaslav and Netflix chief Ted Sarandos. They have a different view of the events that unfolded over the past 48 hours, according to people with knowledge of the matter.
“(Zaslav) gave them six tries and they still couldn’t beat Netflix’s bid,” said a person close to the WBD chief.
Despite all the static, Zaslav, known as Zas in media circles, is said to be open for another counterbid from the Ellisons. Anything is possible before any merger closes – particularly one like this where the competition was some of the fiercest in recent corporate history, according to people close to the WBD chief.
“If the Ellisons come back with something more than $30 a share, possibly around $35 that pays off the Netflix breakup fee they could be the owners,” said a person at WBD. “And it’s very possible they will, and when they do this is not over. We will have to sit down and think about what to do next.”
Zaslav is telling people even if the Ellisons want back in, he doubts they have the wherewithal to mount a serious new offer. Among the reasons he turned to Netflix is that he was concerned that Paramount Skydance “is not making any money and was unsure of who is guaranteeing its bid,” said a person with direct knowledge of his thinking. Since Netflix signed a $5.8 billion breakup fee and has billions in cash, its offer is “guaranteed,” this person adds.
“We know we’re getting the money” from Netflix, said one WBD official who asked not to be mentioned by name.
Likewise, Zas was said to be impressed with the size of Netflix’s operations. It has a market cap of above $400 billion compared to Paramount Skydance’s $14.6 billion. Thus Paramount Skydance needed to rely on the $259 billion net worth of Larry Ellison for its roughly $70 billion offer for WBD, which had been declining since most of it is tied up in Oracle stock that has taken a hit along with the correction in AI shares.
Paramount Skydance, meanwhile, believes Zaslav “is playing games’” because it clearly has the money to meet its $72 billion offer plus its deal. Larry Ellison is still enormously rich worth more than $250 billion. This person said WBD stopped communicating with Paramount Skydance’s bankers in recent days, preventing them from going above the $30 a share price they put down. Paramount Skydance believes Netflix will offer Zaslav a cushy job as part of the deal.
People close to Zaslav say no job has been offered, nor does Zaslav want one when this is over. He will retire with plenty of money and probably do some investment work with his long-time mentor, cable-business pioneer John Malone.
Yes Zaslav and Sarandos are chummy, and Zaslav barely knows either of the Ellisons. But that’s not what moved the deal in Netflix’s direction, people close to the WBD chief say.
The Netflix deal contains enough cash – and guaranteed, so-called collared stock – that its $27.75 offer is the equivalent of cash for just the studio and streaming service. The spinoff of the cable assets is worth at least $3 a share, bringing the total offer to at least $30.75 a share or almost $74 billion.
As previously reported by The Post, the Ellisons had drawn up plans to go possibly “hostile” if Netflix won the bidding war, arguing that the Netflix-WBD combo faces fierce, yearslong antitrust opposition from the Trump administration and state attorneys general because of the combined entity’s dominance in streaming.
While no final decision on a hostile bid has been made, the Ellisons believe they have made the superior bid in the buyout drama. Netflix’s $27.75 (85% of it in cash) offer for WBD’s studio and HBO Max streaming service is filled with holes, they plan to argue. It relies on adding roughly $3 a share into its valuation for $30.75 a share – but only after WBD spins off the rest of the company, namely its cable assets like CNN and Discovery in a previously planned deal.
The Ellisons also believe the cable assets are worth closer to $2 a share, making theirs the highest bid.
A rep for WBD had no comment as did one for Paramount.
Zaslav, by the way, believes the regulatory obstacles for Netflix have been minimized by Sarandos, who in recent weeks, is said to have met with President Trump and developed a “friendship” with him.
During those meetings, Sarandos argued the merits of the Netflix-WBD deal, its absence of overlap, meaning less job losses, its ability to produce movies in the US and that with competition from social media, the antitrust concerns of combining the third largest streamer with Netflix are overblown.
A White House rep had no immediate comment and a Netflix press official declined repeated requests for comment on Sarandos’s conversations with Trump.
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