Netflix's Bid For Warner Bros. Now Looks More Like A Sure Thing

Warner Bros. Discovery has officially rejected Paramount's revised offer to buy the company, saying it was "not in the best interests of WBD and its shareholders." The offer also does qualify as a "superior proposal" based on the definition in WBD's pact with Netflix that was announced back in December.

After WBD announced a deal with Netflix, Paramount launched a hostile bid, appealing directly to WBD shareholders. Paramount later sweetened the deal, including a massive $40.4 billion guarantee from Larry Ellison, but WBD's shareholders rejected this as well.

WBD's board of directors said on January 7 that it continues to recommend that shareholders approve Netflix's bid and reject Paramount's.

As announced previously, Paramount's offer was $30 per share for the entirety of WBD, compared to $27.75 from Netflix for select pieces of the group, including its film, TV, and gaming divisions. Paramount's offer would amount to many billions of dollars more for WBD, but there are numerous other factors involved in the terms of the transaction as well.

WBD board of directors chair Samuel A. Di Piazza Jr. said in a statement, "Paramount's offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed."

Contrasting this, he said WBD's deal with Netflix offers "superior value at greater levels of certainty, without the significant risks and costs Paramount's offer would impose on our shareholders."

Again, Netflix is trying to buy most, but not all of WBD's assets, whereas Paramount was seeking to take ownership of every part of the company.

Both Netflix co-CEO Ted Sarandos and Paramount boss David Ellison have personally met with US President Donald Trump. His son in law, Jared Kushner, was originally involved in Paramount's hostile takeover bid for WBD through his company Affinity Partners, but later dropped out.

There is a gaming angle here, too, as whichever company acquires WBD--which now looks even more likely to be Netflix--may also take ownership of the company's vast gaming division, which owns numerous game franchises and studios. There is also the possibility that a deal does not materialize at all, for any number of reasons.

Senator Elizabeth Warren (D-MA) recently discussed why she believes media consolidation in this manner will negatively impact consumers, saying she would prefer no deal to happen at all.

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