In a high-stakes meeting in New York on Tuesday, Paramount’s CEO David Ellison aimed to persuade investors from Warner Bros. Discovery (WBD) that his company offers a more advantageous investment over Netflix in their ongoing bidding war for control of the Hollywood group. Ellison’s team, including chief legal officer Makan Delrahim and chief strategy officer Andy Gordon, sought to address concerns regarding Paramount’s financial backing, which notably includes significant investments from Middle Eastern stakeholders.
Investors who attended the meeting expressed a renewed sense of optimism regarding Paramount’s $108 billion bid, with some emphasizing the clarity and thoroughness with which Ellison answered regulatory and operational questions. Veteran media investor Mario Gabelli noted that both he and his clients were inclined to favor the tender offer if Netflix doesn’t revise its bid structure.
The competitive landscape is shifting, casting uncertainty over the future of major Warner Bros. properties, including HBO and CNN. The potential acquisition is not only captured the attention of Wall Street but also reached the ears of US political figures, with former President Donald Trump stating his intention to engage in the decision-making process.
Gabelli suggested that Paramount’s bid might receive quicker regulatory approval, stating it is “less complicated” compared to Netflix’s offer. This present tension follows WBD’s acceptance of an $83 billion proposal from Netflix just days earlier, which would primarily cover its studio and streaming assets, excluding traditional television channels like CNN.
In terms of valuation, Paramount’s cash offer of $30 per share uplifts WBD’s stock from a low of $12 in September to $28 at Tuesday’s close. Investors are aware that they have until January 8 to accept Paramount’s offer, while WBD’s board is expected to respond by December 22. Some shareholders anticipate that Paramount will sweeten its bid prior to the expiration of the tender offer, especially since the company indicated that $30 was not its “best and final” price in a regulatory filing.
The intense competition between Paramount and Netflix underscores the escalating stakes within the media industry, as traditional entertainment players continue to navigate the evolving landscape of streaming and content creation.
