The proposed acquisition of Warner Bros. Discovery (WBD) has escalated from a negotiated asset sale to an unforeseen corporate battleground. The media conglomerate, initially poised to sell its key studio and streaming assets to Netflix, is now the target of a hostile $108.4 billion all-cash tender offer, injecting massive geopolitical and regulatory uncertainty into the transaction.
The David Ellison Gambit: A Legacy of Confrontation
Just days after the WBD Board of Directors unanimously approved a definitive agreement with Netflix for an enterprise value of approximately $82.7 billion (or $27.75 per share, covering only the studio and streaming divisions), a potent counter-bid materialized. Paramount (via Skydance Media), under the leadership of CEO David Ellison, launched an aggressive, direct-to-shareholder tender offer for the entirety of Warner Bros. Discovery.
The $30 per share all-cash valuation represents a significant premium over the Netflix offer and includes the entirety of WBD’s Global Networks division (CNN, TNT, etc.), which the Netflix deal had excluded. This bold, confrontational strategy is not lost on market observers. David Ellison is leveraging a playbook familiar to his father, Oracle co-founder Larry Ellison, whose career is famously defined by a series of successful, often bruising, hostile takeovers that reshaped the technology landscape. The younger Ellison’s move is a powerful assertion of market ambition and a clear attempt to disrupt a settled boardroom decision through superior financial terms.
The Capital Structure: Geopolitical Undercurrents
The financial architecture of the Paramount bid is as complex as its strategic aims. The all-cash nature, which is particularly attractive to shareholders in a volatile market, is underpinned by a consortium featuring major global investors. Chief among these are powerful sovereign wealth funds: Saudi Arabia’s Public Investment Fund (PIF), the Qatar Investment Authority, and Abu Dhabi’s L’imad Holding Company.
Crucially, the consortium also includes Affinity Partners, the private equity firm led by Jared Kushner, President Donald Trump’s son-in-law. The presence of significant foreign capital, coupled with politically connected domestic partners, has immediately amplified regulatory concerns in Washington D.C. Several U.S. lawmakers have already raised national security concerns, focusing on the potential for foreign influence over critical American media and journalistic assets (namely CNN and the vast WBD content library). While Paramount has stressed that foreign backers will forego governance rights, the Committee on Foreign Investment in the United States (CFIUS) scrutiny is anticipated to be intense for this transaction.
Deal Status: No Transaction is Finalized
It must be emphasized that NEITHER the Netflix transaction nor the Paramount hostile tender offer constitutes a finalized sale.
- Netflix Agreement: This deal has the WBD Board’s approval but remains contingent upon WBD shareholder consent, the completion of the Global Networks spin-off, and, critically, anti-trust clearance. The agreement includes a significant $2.8 billion termination fee if WBD opts to break the contract.
- Paramount Tender Offer: This is a direct appeal to shareholders, circumventing the WBD board’s initial decision. The WBD Board has a fiduciary duty to review this materially superior cash offer and must formally advise shareholders within 10 business days on how to respond. The Board’s decision, and the subsequent shareholder vote, will determine if the Netflix agreement is ultimately derailed.
The immediate future of WBD is now squarely in the hands of its shareholders and the complex web of regulatory bodies. The media sector is bracing for an extended period of financial maneuvering, regulatory due diligence, and potentially a formal proxy fight as the parties contest control of one of Hollywood’s most valuable assets.
