Paramount Wins Hostile Takeover Bid For Warner Bros.

In early December, Paramount seemed to have lost to Netflix in a bidding war to purchase Warner Bros. Discovery (WBD), but 10 weeks and roughly $20 billion later, the conglomerate reportedly will get its way after all. On Thursday, as The Wrap reports, Netflix announced it will abandon its efforts in the face of Paramount's hostile takeover bid, leaving Paramount and the Ellison family in possession of a massive swath of American cultural production and free to make it as poisonous as they please.

WBD started walking down this road when it announced plans to unbuckle the two halves of its business from each other last summer. In this the venerable entertainment company was simply following Comcast's lead, and not really intending to sell either its movie studio and streaming businesses or its cash-generating yet debt-saddled TV "global networks business"—but once the Ellison family bought Paramount, the WBD board clearly saw an opportunity to get a little bidding war going, and put a big For Sale sign out on the front lawn. WBD's board initially went with Netflix's proposal despite the streaming giant offering less cash than Paramount, because Netflix had agreed to buy only the streaming stuff whereas Paramount wanted everything. Netflix agreed to pay $72 billion, or $27.75 per share, yet WBD's internal math reportedly valued the bid at closer to $31–32 per share, since WBD shareholders would get to hold onto some equity.

Paramount wanted to pay cash for everything, and offered $30 per share at the launch of its hostile takeover. In its appeal to WBD shareholders, Paramount said the Netflix deal "offers inferior and uncertain value and exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process." This was less a friendly warning than a threat. What it meant was: The Ellison family's close personal friend Donald Trump is not going to let this deal through.