WHY WARNER BROS IS BEING HOTLY CHASED

On 5 December, Netflix signed an agreement to acquire Warner Bros Discovery's (WBD) studio and streaming businesses for an enterprise value of $82.7 billion.

- BY HOWINDIALIVES.COM

WBD's board chose Netflix over the rival Skydance, led by chief executive officer (CEO) David Ellison (son of billionaire Larry Ellison), launched a hostile bid for the entire company, valuing WBD at roughly $108 billion. Ellison bypassed the WBD board, appealing directly to shareholders. The fight is now turning political, with unions voicing their opposition to US President Donald Trump getting involved.

IMPACT ON STOCKS

NETFLIX VALUED WBD's equity at about $72 billion, or $27.75 per share, offering $23.25 in cash and $4.50 in Netflix stock. The offer excluded WBD's debt-heavy cable networks which would be spun off into a new public company, Discovery Global.

Paramount accused WBD's board of ignoring six superior offers and conducting a biased process that favoured Netflix. In an open letter, Ellison touted the strength of Paramount's all-cash bid, its cleaner regulatory path, and its plan to keep WBD intact by merging HBO Max with Paramount+, its OTT platform.

WBD's board must respond to by 18 December, but switching suitors would require paying Netflix a $2.8 billion break-up fee. WBD shares rose about 6% after the Netflix announcement. Netflix shares fell 3%, led by concerns over $59 billion of debt needed for the deal. Paramount shares initially fell about 10% after losing the board auction but jumped 7-9% after its hostile bid.

WHY NETFLIX IS PREFERRED