In a bold move, David Ellison is appealing directly to Warner Bros. Discovery (WBD) shareholders as tensions rise over a potential acquisition. Frustrated by what he perceives as a lack of response from WBD CEO David Zaslav, Ellison has taken to issuing a detailed letter advocating for his company’s bid.
On Wednesday, Ellison outlined his position in a letter aimed at WBD stockholders, asserting that his company, Paramount Skydance, represents the most attractive buyer compared to Netflix. He urged investors to take immediate action by tendering their shares, effectively signaling their willingness to sell to Paramount through a formal letter of transmittal.
Ellison’s current offer is his seventh, proposing a purchase price of $30 per share in cash. He argues that this offer provides “superior value” compared to Netflix’s previously accepted bid, which includes $23.25 in cash, $4.50 in stock, and a share in WBD’s Global Networks spinoff. He emphasized that the real total value of the Netflix deal is significantly lower than it has been portrayed, challenging the reported valuation of around $82.7 billion.
Moreover, Ellison highlighted that an acquisition by Paramount would likely face fewer regulatory hurdles than a deal with Netflix, particularly in Europe where legislative measures like the Digital Services Act and the Digital Markets Act aim to limit the power of major tech companies.
In his letter, Ellison reinforced his commitment to delivering an offer that not only surpasses Netflix’s in value but also promises a “faster, more certain path to completion.” He urged shareholders to act promptly, stating, “IT IS NOT TOO LATE TO REALIZE THE BENEFITS OF PARAMOUNT’S PROPOSAL IF YOU CHOOSE TO ACT NOW AND TENDER YOUR SHARES.”
The letter took a personal tone when addressing allegations about the financial reliability of Paramount Skydance. Ellison dismissed suggestions that the company might be untrustworthy or could evade its financial obligations. He emphasized that such claims were unfounded, pointing out that WBD and its advisors had not reached out to him for clarification or to discuss any concerns regarding the offer.
This public appeal comes amid rising tensions between Ellison and Zaslav, exacerbated by reports of unread messages between the two. Ellison’s direct outreach to shareholders may signal a significant shift in the ongoing negotiation process as he seeks to sway investor opinion in favor of his bid.
