Paramount Skydance is launching a hostile bid to buy Warner Bros. Discovery after it lost out to Netflix in a months-long bidding war for the legacy assets, the company said Monday.
Paramount will go straight to WBD shareholders with an all-cash, $30-per-share offer. That's the same bid WBD rejected last week and equates to an enterprise value of $108.4 billion. The offer is backstopped with equity financing from the Ellison family and the private-equity firm RedBird Capital as well as $54 billion in debt commitments from Bank of America, Citi and Apollo Global Management, Paramount said in a news release.
Shares of Paramount were 4% higher in early trading Monday. Shares of Warner Bros. Discovery were up about 6%. Shares of Netflix fell 3%.
"We're really here to finish what we started," Paramount Skydance CEO David Ellison told CNBC's "Squawk on the Street" Monday. "We put the company in play."
Paramount Skydance began its hunt for Warner Bros. Discovery in September, submitting three bids before WBD launched a formal sale process that ultimately brought in other suitors.
On Friday, Netflix announced a deal to acquire WBD's studio and streaming assets for a combination of cash and stock, valued at $27.75 per WBD share, or $72 billion. Paramount had been bidding for the entirety of Warner Bros. Discovery, including those assets and the company's TV networks like CNN and TNT Sports.
"We're sitting on Wall Street, where cash is still king. We are offering shareholders $17.6 billion more cash than the deal they currently have signed up with Netflix, and we believe when they see what it is currently in our offer that that's what they'll vote for," Ellison said.
Ellison said Monday he places a value of $1 per share on the linear cable assets, which are set to trade as a separate public entity called Discovery Global in mid-2026. WBD executives have privately valued the assets closer to $3 per share.
Paramount has repeatedly argued to the WBD board of directors that keeping Warner Bros. Discovery whole is in the best interest of its shareholders.
Paramount made a bid on Dec. 1 and heard back from WBD that it needed to make certain alterations to the offer, Ellison said Monday. When Paramount made the changes and upped its bid to $30 per share, Ellison never heard back from WBD CEO David Zaslav, he said.
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