Paramount's $30 Per Share Cash Bid Outshines Netflix’s Offer for WBD: Superior Value and Lower Risk?

Paramount's All-Cash Offer Promises Immediate, Higher Value to WBD Shareholders

In a move that could reshape the streaming landscape, Paramount, now merged with Skydance, has delivered a $30 per share all-cash offer to acquire Warner Bros. Discovery (WBD). This proposal goes head-to-head against WBD's already announced agreement with Netflix—one that, according to Paramount, offers less value and higher risk to WBD shareholders. Paramount argues its deal isn’t just about higher cash but a cleaner, quicker path to completion, free from the complex entanglements that might hinder the Netflix deal.

The company emphasized it has secured all the necessary funding—$41 billion in new equity, underwritten by the Ellison family and RedBird Capital, and $54 billion in committed debt financing from major institutions like Bank of America, Citi, and Apollo. Notably, the Ellison family trust alone claims over $250 billion in assets, more than six times the needed equity funding, and the structure mirrors what WBD's own advisors have used in major transactions like Twitter.

Paramount-Netflix Comparison: Higher Cash and Fewer Conditions?

Paramount claims Netflix’s $23.25 per share in cash and $4.50 in stock, plus an uncertain value for WBD’s Global Networks spin-off, falls short both in certainty and immediate payout. Paramount highlights its own absence of financing conditions and a willingness to agree to material regulatory remedies, contrasting Netflix’s refusal to allow any impact on its business operations—even if requested by regulators. Netflix’s outside closing date could extend as long as 21 months, versus what Paramount contends is a faster route with regulatory filings already underway.

Regulatory Challenges: Paramount Highlights Risks for Netflix

A major sticking point, according to Paramount, is Netflix’s dominant global streaming position, especially in Europe, where Netflix commands 51% of subscription video-on-demand (SVOD) revenues—far ahead of Disney and others. Paramount argues this raises significant competition concerns that will make regulatory approval for Netflix difficult and time-consuming, especially under new European rules like the Digital Services Act. In contrast, Paramount claims it faces fewer antitrust hurdles and is already in discussions with U.S. and European authorities, supported by a $5 billion reverse termination fee if the deal falls through on regulatory grounds (Netflix’s comparable fee is just $800 million higher, which Paramount says doesn't compensate for the risk differential).

Uncertainty and Shareholder Dissatisfaction Over WBD’s Process

The Paramount letter also details a sale process that left it in the dark, never receiving direct negotiations or even requests for best-and-final offers, even after six rounds of proposals. Paramount questions why, despite their superior and fully funded bid, WBD moved to finalize a deal with Netflix—echoing the confusion reportedly expressed by multiple WBD shareholders and some equity analysts.

Key Takeaways: Why WBD’s Outcome Could Shift Streaming’s Balance

• Value Differential: Paramount’s $30 all-cash offer provides immediate, higher value with secured financing, compared to the less straightforward and potentially less valuable Netflix package.
• Regulatory Timeline: Paramount claims its path is smoother, with major regulatory filings already underway and strong remedy commitments. Netflix faces higher uncertainty, especially in Europe.
• Market Power: If Netflix succeeds, its streaming dominance could reach a combined 43% market share globally—raising tough questions for competition regulators and WBD shareholders alike.

The WBD board now faces a crucial decision—opt for the higher cash, speed, and certainty of Paramount, or stick with the Netflix transaction and risk a prolonged regulatory gauntlet. For Netflix investors, the bid signals an ambition to further solidify its global SVOD dominance, but also sets up a test of regulatory tolerance for mega-mergers in the streaming era. Shareholders and market-watchers may want to monitor WBD’s next filing with the SEC for hints at the final direction.

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