Paramount goes hostile in bid for Warner Bros challenging Netflix's 72 billion offer

    New York, Dec 11 (AP) Paramount has launched a hostile takeover offer for Warner Bros Discovery, initiating a potentially bruising battle with rival bidder Netflix to buy the company behind HBO, CNN and a famed movie studio along with the power to reshape much of the nation's entertainment landscape.
    Emerging just days after top Warner managers agreed to Netflix's USD 72 billion purchase, the Paramount's Monday bid seeks to go over the heads of those leaders by appealing directly to Warner shareholders with more money -- USD 77.9 billion -- and a plan to buy all of Warner's business, including the cable business that Netflix does not want.
    Paramount said its decision to go hostile came after it made several earlier offers that Warner management "never engaged meaningfully" with following the company's October announcement that it was open to selling itself.
    In its appeal to shareholders, Paramount noted its offer also contains more cash than Netflix's bid -- USD 18 billion more -- and argued that it is more likely to pass scrutiny from President Donald Trump's administration, a big concern given his habit of injecting himself in American business decisions.
    Over the weekend, Trump said the Netflix-Warner combo "could be a problem" because of the size of the combined market share and that he planned to review the deal personally.
    For its part, Netflix says it is confident Warner will reject the Paramount bid and that regulators, and Trump, will back its deal, citing multiple conversations that co-CEO Ted Sarandos has had with him about the streaming company's expansion and hiring.
    "I think the president's interest in this is the same as ours, which is to create and protect jobs," Sarandos said on Monday at an investor conference.
    
    Battle draws political attention in Washington
    
    The fight for Warner drew strong reaction in Washington, with politicians from both major parties weighing in on the likely impact on streaming prices, movie theatre employment and the diversity of entertainment choices and political views.
    Paramount, run by David Ellison, whose family is closely allied with Trump, said it had submitted six proposals to Warner over a 12-week period before the latest offer.
    "We believe our offer will create a stronger Hollywood. It is in the best interests of the creative community, consumers and the movie theatre industry," the Paramount CEO said in a statement. Ellison added that his deal would lead to more competition in the industry, not less, and more movies in theatres.
    A regulatory document released on Monday suggested another possible Paramount advantage to win over Trump: An investment firm run by Trump's son-in-law Jared Kushner would be investing in the deal, too.
    Also participating would be funds controlled by the governments of three unnamed Persian Gulf countries, widely reported as Saudi Arabia, Abu Dhabi and Qatar.
    
    Trump is a wild card
    
    Trump is a wild card given his tendency to make decisions based on gut and his personal mood.
    On Monday, he lashed out at Paramount for allowing "60 Minutes" to interview his ally-turned-enemy Rep Marjorie Taylor Greene, writing on social media that "THEY ARE NO BETTER THAN THE OLD OWNERSHIP."
    The drama surrounding control of Warner began on Friday when Netflix made the surprise announcement that it had struck a deal with its management to buy the Hollywood giant behind "Harry Potter," HBO Max and DC Studios.
    The cash and stock proposal was valued at USD 27.75 per Warner share, giving it a total enterprise value of USD 82.7 billion, including debt that will be assumed in the deal. By contrast, the Paramount offer is for USD 30 per Warner share, and worth USD 108 billion, included assumed debt. Paramount's offer is set to expire on January 8 unless it is extended.
    But comparing the two deals is complicated because they are not buying the same thing. The Netflix offer, if it goes through, will only close after Warner completes its previously announced separation of its cable operations. (AP)
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(This story has not been edited by THE WEEK and is auto-generated from PTI)