Paramount Skydance (NASDAQ:PSKY) has made an all-cash offer to acquire Warner Bros. Discovery Inc (NASDAQ:WBD, XETRA:J5A) in a move directly challenging a previously announced deal with Netflix Inc (NASDAQ:NFLX, XETRA:NFC).
Paramount is offering $30 per share in cash for all outstanding shares of Warner Bros, valuing the company at approximately $108.4 billion, or around $82 billion to $83 billion including assumed debt.
The offer covers the entirety of Warner Bros, including its global networks such as CNN and Discovery, unlike Netflix’s agreement, which is limited to the film, television, studio, and streaming operations.
Netflix reached its agreement with Warner Bros last week in a transaction valued at roughly $72 billion, or about $27 to 28 per share.
That deal excludes certain cable and news networks and is subject to regulatory review as well as Warner Bros's planned separation of its cable operations.
Paramount described its proposal as providing a higher and more certain value to shareholders. The company belives that its all-cash offer could close faster than the Netflix transaction and avoids leaving Warner Bros shareholders with a sub-scale, highly leveraged stub in Global Networks.
The bid is supported by equity commitments from the Ellison Family and RedBird Capital, alongside debt financing from Bank of America, Citi, and Apollo.
David Ellison, Paramount CEO, said the company’s offer “provides superior value, and a more certain and quicker path to completion” compared with the Netflix deal.
"We believe our offer will create a stronger Hollywood. It is in the best interests of the creative community, consumers and the movie theater industry,” Ellison said.
“We believe they will benefit from the enhanced competition, higher content spend and theatrical release output, and a greater number of movies in theaters as a result of our proposed transaction.”
He added that Paramount is taking its offer directly to shareholders after Warner Bros's board rejected earlier proposals.
Shares of WBD jumped 5.7% on the news to about $27.60 per share and Paramount Skydance was up 5.2%. Netflix fell 4.5% on the news.