Paramount Skydance on Monday launched a hostile bid worth $108.4 billion for Warner Bros. Discovery, in a last-ditch effort to outbid Netflix and create a media powerhouse that would challenge the dominance of the streaming giant.
Netflix had emerged victorious on Friday from a weeks-long bidding war with Paramount and Comcast, securing a $72 billion equity deal for Warner Bros. Discovery's TV, film studios and streaming assets.
But Paramount's latest attempt means the jockeying for Warner Bros. and its prized HBO and DC Comics assets will not come to a conclusion swiftly.
Paramount argued that its $30-per-share, all-cash offer for the entirety of Warner Bros. Discovery is superior to Netflix's bid, providing shareholders $18 billion more in cash and an easier path to regulatory approval.
Paramount, unlike Netflix, is also offering to buy the cable assets of Warner Bros., and asking shareholders of the company to reject the Netflix bid.
It also argued that the combination of Paramount and Warner Bros. would be in the best interest of the creative community, movie theaters and consumers, who would benefit from enhanced competition.
"We believe our offer will create a stronger Hollywood," Paramount CEO David Ellison said in a statement.
Netflix's offer comes with a $5.8 billion break-up fee and was likely to face strong antitrust scrutiny; U.S. President Donald Trump raised questions about the offer over the weekend. The bid has already drawn sharp criticism from bipartisan lawmakers and Hollywood unions over concerns that it could lead to job cuts as well as higher prices for consumers.
Shares of Paramount were up 3.7% in morning trading following the company's bid. Warner Bros. Discovery jumped 6.7%, while Netflix shares fell 3.6%.
However, Paramount's bid could also face its own level of scrutiny. A Paramount-Warner Bros. combination would boost its dominant position in the studio business, which some also worry could lead to job losses as the industry rapidly consolidates.
Reports had suggested Paramount had raised its offer to $30 per share on Thursday for the entire company, but that the Warner Bros. board had concerns about the financing.
In its appeal to shareholders, Paramount said it submitted six proposals over the course of 12 weeks, but Warner Bros. Discovery "never engaged meaningfully" with these proposals. The $30 cash offer represents a 139% premium over the company's undisturbed stock price, and bests Netflix's $27.75 offer that mixes cash and stock.
"The Warner Bros. Discovery acquisition is far from over. Netflix is in the driver's seat but there will be twists and turns before the finish line. Paramount will appeal to shareholders, regulators, and politicians to try to stymie Netflix. The battle could become prolonged," said eMarketer senior analyst Ross Benes.
Paramount submitted multiple offers starting in September to forge an entertainment powerhouse capable of challenging Netflix and tech giants such as Apple that have expanded into media but faced rejections.
The studio argued that the combination of its Paramount+ streaming service with Warner Bros.' HBO Max would position it for growth, and create a meaningful competitor to Netflix, Amazon Prime Video or Walt Disney's Disney+, offering consumers more choice.
Paramount maintained that it would be a champion of Hollywood and its talent, and would remain committed to releasing movies in theaters, and would continue to do so if combined with Warner Bros.
Warner Bros.' television networks, which include CNN and TNT, would be in a stronger position when united with Paramount's television portfolio, the studio argued.
It had sent a letter to Warner Bros, questioning the sale process and alleging the company has abandoned a fair bidding process and predetermined Netflix as the winner.
That followed reports that Warner Bros.' management called the Netflix deal a "slam dunk" while speaking negatively about Paramount's offer.
In an interview with CNBC on Monday, Paramount CEO David Ellison said there is an "inherent bias" against his company in the bidding.
"We will be the largest investor in this deal. We're literally sitting here today because we are fighting for our shareholders, and we're also fighting for the shareholders of Warner Bros. Discovery," Ellison said.
Some analysts and industry experts see Paramount as the best candidate for acquiring Warner Bros. Discovery, given Ellison's deep pockets – backed by his father, Oracle co-founder and the world's second-richest person, Larry Ellison, who has close ties with the Trump administration.
Bloomberg News has reported that Trump met Netflix co-CEO Ted Sarandos in mid-November, telling the executive that Warner Bros. should sell to the highest bidder.
The combined company will have substantial overlap, and its combined streaming revenue would decline unless Netflix doubles its prices or runs separate platforms, neither of which the brokerage expects, Morningstar analysts have said.
Looking to allay antitrust fears, Sarandos had said the deal would drive value for consumers, shareholders and talent, saying Netflix is "highly confident" in the regulatory process.
Analysts said Netflix's motivation would stem from securing exclusive, long-term control over premium IP and reducing reliance on external studios as it expands into gaming, live entertainment and broader consumer ecosystems.
Access to WBD's vast IP trove would provide immediate credibility, audience reach and merchandising potential for its gaming ambitions, an area where Netflix is still building original content and brand recognition.
