David Ellison is fighting back against Netflix and its proposed $72 billion takeover of Warner Bros. — including HBO Max and the HBO cable TV channels — by commencing an all-cash tender offer that would see Paramount acquire all of Warner Bros. Discovery‘s outstanding shares at a valuation of $30.
Paramount would pay cash for the shares in WBD, with the promise that, unlike Netflix, it would acquire all of Warner Bros. Discovery — potentially merging CNN with CBS News.
The offer, that includes the Global Networks segment, is being pitched by Paramount as “strategically and financially compelling” to WBD shareholders. And, it provides what Paramount calls “a superior alternative” to the previously announced Netflix offer.
That deal was panned by Paramount, which last week questioned the “fairness and accuracy” of the sale process conducted by David Zaslav-led WBD.
Now, Ellison is seeking to usurp Ted Sarandos and Netflix’s C-Suite with a bid that he believes is in the best interest of WBD shareholders, calling the Netflix proposal as one that “offers inferior and uncertain value and exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process with an uncertain outcome along with a complex and volatile mix of equity and cash.”
The Netflix proposal entails a mix of cash ($23.25) and stock ($4.50), subject to collar and the future performance of Netflix, equating to an enterprise value of $82.7 billion.
Will the WBD board listen to Ellison? He certainly hopes this attracts their undivided attention, after it was presented the offer but never said “no” in writing to Paramount.
“The Paramount offer for the entirety of WBD provides shareholders $18 billion more in cash than the Netflix consideration,” Paramount said on Monday morning. “WBD’s Board of Directors recommendation of the Netflix transaction over Paramount’s offer is based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals and encumbered by high levels of financial leverage assigned to the entity.”
Paramount on Monday presented Warner Bros. Discovery with an all-cash offer at $30 per share, equating to an enterprise value of $108.4 billion.
This, says Paramount, represents a 139% premium to the “undisturbed” WBD stock price of $12.54 as of September 10, 2025.
In contrast, the Netflix proposal entails a mix of cash ($23.25) and stock ($4.50), subject to collar and the future performance of Netflix, equating to an enterprise value of $82.7 billion.
“WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company,” Ellison said. “Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion.”
He added that, despite Paramount “submitting six proposals over the course of 12 weeks, WBD never engaged meaningfully with these proposals which we believe deliver the best outcome for WBD shareholders.”
Paramount has now taken its offer directly to WBD shareholders and its Board of Directors “to ensure they have the opportunity to pursue this clearly superior alternative.”
As of 11:22am Eastern, “PSKY” was soaring skyward in value, rising 7.2% to $14.32 in active trading on the Nasdaq GlobalSelect market.
HOW PARAMOUNT WOULD PAY FOR WBD:
The acquisition of WBD by Paramount would be financed by new equity backstopped by Paramount’s “well-capitalized principal equity holders” — and $54 billion of debt commitments from Bank of America, Citi and Apollo.
Centerview Partners LLC and RedBird Advisors are acting as lead financial advisors to Paramount.
Bank of America Securities, Citi and M. Klein & Company are also acting as financial advisors.
Cravath, Swaine & Moore LLP and Latham & Watkins LLP are acting as legal counsel to Paramount.
DOLLARS FROM EYEBROW-RAISING SOURCES
Not noted in Ellison’s pitch to WBD shareholders, but reported by respected Axios reporter Sara Fischer, is the potential influence of the Trump Administration in fueling Paramount’s hostile takeover bid.
How so? She points to “sovereign wealth funds” and questionable commitments — noted in a SEC filing.
In the “Offer to Purchase for Cash,” it is clearly stated that neither FCC nor CFIUS approvals were conditions to Paramount’s merger agreement. “Such proposal again reiterated the absence of any financing condition,” Paramount noted, adding that it included signed debt commitment letters from the “Debt Commitment Parties” in the amount of $50 billion.
It also included simplified documentation for Paramount’s equity financing and provided an allocation for such equity financing sources, which included an $11.8 billion commitment from the Ellison family, an aggregate $24 billion commitment from three sovereign wealth funds from the Gulf, a $1 billion commitment from Chinese multinational technology conglomerate Tencent, and commitments from RedBird Capital Partners and Affinity Partners.
The sovereign wealth funds from the Persian Gulf represent those from Qatar, Saudi Arabia and the United Arab Emirates, Fischer notes.
The bigger takeaway? Affinity Partners was formed in 2021 by Jared Kushner, President Trump’s son-in-law and a senior advisor during Trump’s first presidency.
“CFIUS operates under Treasury and is mostly Cabinet members, but POTUS has power to ultimately decide whether a deal should be blocked,” Fischer shares.
Meanwhile, Fischer notes that the Paramount bid for WBD comes amid new criticisms of CBS News from Trump, in reaction to a “60 Minutes” interview with Rep. Marjorie Taylor Greene (R-Ga.), now a foe of the president.
SARANDOS AT UBS: THAT’S NICE
Netflix co-CEO Sarandos and fellow co-chief executive Greg Peters told attendees of a UBS conference in New York on Monday that the Paramount offer was “entirely expected.”
As they see it, the deal is about as valuable as 32-year-old paper currency from Venezuela — worthless.
“We have a deal done, and we are really happy with the deal for shareholders, for consumers, it’s a great way to create and protect jobs in the entertainment industry,” Sarandos said. “We’re super confident we are going to get it across.”
