Los Angeles: Warner Bros Discovery is expected to recommend that its shareholders vote against a hostile takeover bid from Paramount Global, according to multiple media reports.
Paramount had earlier announced plans to bypass Warner Bros Discovery’s board and take its all-cash offer of $30 per share directly to shareholders after the board rejected several acquisition proposals.
The expected recommendation from Warner Bros Discovery deals a setback to Paramount’s attempt to acquire the rival studio in a deal valued at about $108 billion.
Competing offers
The takeover battle has intensified in recent weeks. Paramount’s $30-per-share offer competes with a proposal from Netflix, which has offered $27.75 per share in a mix of cash and stock.
Since the bids emerged, Warner Bros Discovery shares have risen sharply, climbing from around $24 earlier this month to trade close to $30.
If Warner Bros Discovery were to walk away from its agreement with Netflix, it would be required to pay a $2.8 billion break-up fee.
Financing concerns grow
Questions have also been raised about the financing of Paramount’s bid. Jared Kushner’s private equity firm, Affinity Partners, has withdrawn from the financing group backing Paramount’s offer, according to reports.
Billionaire Oracle co-founder Larry Ellison remains a key financial backer of the Paramount-Skydance bid. His son, David Ellison, is chairman and chief executive of Paramount Skydance.
Trump comments add pressure
Former US president Donald Trump has publicly commented on the proposed takeover, saying that CNN, which is owned by Warner Bros Discovery, should be sold as part of any transaction.
Trump has also criticised Paramount, which owns CBS, following the cancellation of The Late Show earlier this year. CBS said the decision was based on financial reasons.
What happens next
Warner Bros Discovery shareholders are now expected to decide between a board-backed deal with Netflix and Paramount’s higher, but hostile, offer.
The outcome will determine the future ownership of Warner Bros Discovery and could reshape the US media and streaming industry.
