At the recent UBS media conference, Kevin Mayer, the former Disney executive and CEO of TikTok, expressed his expectation that the Ellissons would increase their hostile bid for Warner Bros. Discovery (WBD) in hopes of enticing shareholders away from Netflix. Mayer provided insights on the competitive landscape affecting WBD’s valuation, predicting that the price of such an offer could rise by an additional five to ten billion dollars.
His comments come in the wake of Paramount’s series of offers for WBD, the most recent being a bid at $30 per share, which values the company at approximately $108 billion. All previous offers have been rejected by WBD, led by CEO David Zaslav, who instead finalized a deal with Netflix for its studio and streaming assets at $27.75 in cash and stock, totaling around $82.7 billion in enterprise value. In an aggressive move, Paramount has since taken its proposal directly to WBD shareholders through a hostile tender offer, which WBD is currently evaluating.
Mayer emphasized that Paramount’s revised offer, a replica of its previous one presented to WBD management, is unlikely to succeed in its current form. He foresees the situation escalating, stating, “It’s just a first step,” and anticipates “fireworks” as negotiations progress.
Drawing parallels from his previous experience at Disney during the company’s acquisition of 21st Century Fox in 2019, Mayer highlighted that corporate boards must consider all offers—including those that are higher—until a deal is finalized. Referring to the initial agreement Disney had with Rupert Murdoch at $28 a share before Comcast’s spoiler bid of $35, Mayer noted that Disney ultimately raised its offer to $38, but the back-and-forth negotiations added $19 billion to the total price tag. This experience, he suggested, might provide insight into the potential trajectory of the current bids involving WBD.
Mayer posited that both Paramount and Netflix see a compelling rationale for acquiring WBD, particularly as the media landscape undergoes significant transformation. He touched on regulatory challenges for Netflix and raised questions about how streaming might be defined in this context. The addition of HBO Max to Netflix could further solidify its already substantial market position—a point underscored even by past President Donald Trump.
Focusing specifically on Netflix’s motivations, Mayer articulated that the streaming giant may be more interested in WBD’s intellectual property than just the streaming service portion of HBO Max. He indicated that Netflix might be willing to make strategic concessions related to streaming to facilitate a potential acquisition. This raises significant questions about antitrust considerations and what compromises could be necessary to complete a deal.
In assessing the rival offers, Mayer concluded that they could be regarded as “roughly equal,” although this assessment hinges on the perceived value attributed to the cable networks that WBD would potentially divest to its shareholders if a transaction with Netflix were to occur.
