In a dramatic turn for the media industry, Warner Bros Discovery is reportedly preparing to formally reject a colossal hostile takeover attempt from rival Paramount Global, valued at $108 billion (£81bn). The move comes as a major financial backer of Paramount's offer has abruptly withdrawn its support.
Key Backer Withdraws as Board Recommends Netflix Deal
Investment firm Affinity Partners, led by Donald Trump's son-in-law Jared Kushner, has confirmed it is pulling out of the financing consortium behind Paramount's aggressive bid. A spokesman for the firm told Sky News' US partner NBC News that "the dynamics of investment have changed significantly." Affinity had been part of a group that included funds from Saudi Arabia and other Middle Eastern nations backing Paramount.
According to reports from Bloomberg and The Wall Street Journal, the Warner Bros Discovery board is now set to advise its shareholders to reject Paramount's unsolicited offer. This paves the way for an alternative, agreed-upon deal with streaming titan Netflix, which struck a $72 billion (£54bn) agreement earlier.
The Stakes in the Streaming Wars
The outcome of this corporate battle will grant the victor a formidable advantage in the intensely competitive streaming market. Should the Netflix acquisition proceed, the platform would gain control of iconic Warner Bros franchises, including the global phenomena of Harry Potter, Batman, and Game of Thrones, alongside an extensive back catalogue of classic films.
Paramount's hostile bid, communicated directly to shareholders in an effort to circumvent the board, offered $30 (£22.50) in cash per share. This represented approximately $18 billion (£13.5bn) more in cash than the rival proposal from Netflix. Netflix's agreed price is $27.75 per share, contributing to the total $72bn valuation for the studio assets.
Regulatory Hurdles and Corporate Strategy
The final deal, whichever prevails, will face intense scrutiny from the US government. The Department of Justice's Antitrust Division is expected to examine the merger closely to ensure it does not harm market competition. Furthermore, a Paramount takeover would see rival US news networks CBS and CNN united under a single corporate parent, a point of significant regulatory interest.
This saga is the latest chapter in Warner Bros Discovery's recent corporate evolution. In June, the company announced a plan to split into two separate entities: one housing its TV and film studios along with the HBO Max streaming service, and another containing the legacy Discovery TV channels focused on cartoons, news, and sports.
The withdrawal of Jared Kushner's firm marks a critical shift in the takeover dynamics, strongly indicating that the Warner board's preference for the Netflix deal is likely to succeed, reshaping the landscape of global entertainment.
