David Ellison isn’t taking David Zaslav’s bait.
The CEO of Paramount Skydance is extending a Jan. 21 deadline for shareholders of Warner Bros. Discovery to accept his “hostile” offer for the company – but isn’t raising the $30-a-share price, On The Money has learned.
On Tuesday, WBD’s wily CEO Zaslav not only touted that he’s getting all cash with Netflix’s $72 billion “winning” bid for his studio and streamer. He also tried to turn up the heat on PSKY CEO Ellison, moving up a shareholder vote on the Netflix deal to as early as February versus its previous slot in May, sources say.
“No more fooling around with lawsuits and other kinds of bulls–t,” one WBD insider familiar with Zaslav’s thinking said. “Either come to the table with more money or go home.”
But On The Money has also learned that Ellison – partnered with his dad, the tech tycoon Larry Ellison, and RedBird Capital’s Gerry Cardinale – isn’t going anywhere anytime soon.
In the next 24 hours he and his team plan to extend their Jan. 21 “tender deadline” giving them more time to convince shareholders to ditch the Netflix offer over theirs. They’re also pressing ahead with a lawsuit designed to show Zas held an unfair bidding process, skewing the deal toward Netflix because of his friendship with the streamer’s CEO Ted Sarandos.
It’s unclear for how long the deadline will be pushed off.
“(They’re) extending the deal in and there is no new money coming as of now,” is how one deal insider described the tense deal negotiations.
That might soon change, of course, as On The Money has reported. PSKY has internal plans to pay as high as $33 a share bringing the total deal cost around $80 billion if need be. Such an offer would be difficult for Netflix to match since it’s paying $27.75 a share recently tweaked to all cash, plus promising $3 a share for WBDs cable properties like CNN and TNT, a spin off that many investors say might not hit that bogey given the recently audience declines of cable TV.
As reported, Netflix has lost close to $170 billion in stock market value since the summer as investors have questioned whether it is overspending for an asset that might not be core to the streaming giant’s business model.
Meanwhile, the Ellisons and RedBird aren’t going for the kill shot just yet. They still believe their $30 a share offer is superior by the numbers and that the regulatory hurdles faced by Netflix are formidable.
Ellison and Cardinale, as On The Money goes to press, are on their private jets returning from a series of meetings with European and UK regulators who appear much more willing to approve their deal than the one proposed by Netflix.
The streaming giant would be combining its No 1 streaming service with WBD’s No 3, HBO Max, a move that has the antitrust cops on both sides of the Atlantic worried about Netflix’s control of a market where most people increasingly consume their entertainment.
Larry Ellison is a longtime friend of President Trump, who has vowed to be involved in the deal approval (in between everything else he does, including making Greenland the 51st state).
“We could sit back and let this deal blow up in regulatory land and buy the company more cheaply,” said one PSKY executive.
Wall Street bankers doubt that will happen and believe PSKY has at least one more bid left in it before it walks.
It’s just not going to happen on Zas’ timetable.
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