Battle for Hollywood assets – Warner Bros shareholders demand better terms from Paramount

The battle for media giant Warner Bros Discovery is becoming increasingly intense.

Despite Paramount bringing Oracle founder Larry Ellison into the game with billions in guarantees, Warner Bros’ major shareholders remain skeptical about the terms of the deal.

Details of the offer

According to Reuters, Paramount Skydance has made key changes to its hostile $108.4 billion takeover bid for Warner Bros:

• Larry Ellison is now personally guaranteeing $40.4 billion to secure the buyout. Previously, financing through a revocable trust had raised doubts in the market.

• The termination fee was increased to $5.8 billion to match Netflix’s offer.

• It remained at $30, which is significantly higher than Netflix’s cash offer.

Investor position

Despite the improved terms, Harris Oakmark (Warner Bros’ fifth-largest shareholder) considers these steps to be too little, too late.

The Warner Bros board of directors currently supports Netflix’s offer. Although the price per share is lower ($23.25 in cash), the structure of the deal is considered more reliable: it includes Netflix shares and the spin-off of Discovery Global into a hotel company.

According to Youssef Geriani of IHT Wealth Management, this battle for HBO Max assets and franchises such as Harry Potter is a unique situation for the market, as opportunities to acquire “first-tier” media assets are extremely rare.

Warner Bros. shareholders have until January 21, 2025, to make a final decision.

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