TLDR
- Netflix co-CEO Greg Peters claims the streaming giant is winning Warner Bros Discovery shareholder support for its $82.7 billion studio acquisition bid
- Peters dismisses Paramount’s competing $108 billion hostile takeover offer as failing to “pass the sniff test”
- Only a small number of WBD shares have been tendered for Paramount’s bid, which relies on $55 billion in debt financing
- Netflix recently revised its offer to all-cash to provide greater deal certainty and expedite closure
- Paramount extended its tender offer deadline to February 20 after Warner Bros board rejected its amended $40 billion equity proposal
Netflix is positioning itself as the frontrunner in the fight for Warner Bros Discovery’s film and television studios. Co-CEO Greg Peters told the Financial Times the company expects to secure shareholder backing for its $82.7 billion acquisition offer.
Peters didn’t hold back when discussing Paramount’s competing proposal. He said the rival bid “doesn’t pass the sniff test” and claimed only a minimal number of WBD shares have been tendered for Paramount’s hostile $108 billion offer.
The Netflix executive pointed to fundamental weaknesses in Paramount’s financing structure. The competing bid relies on $55 billion in debt, which Peters suggested creates uncertainty about deal completion.
Warner Bros Discovery’s board already rejected an amended Paramount offer earlier this month. That proposal included $40 billion in equity personally guaranteed by Larry Ellison, Oracle’s co-founder and father of Paramount CEO David Ellison.
Peters made his position on that arrangement crystal clear. “Without Larry Ellison independently financing this thing, there’s no chance in hell Paramount would ever be able to pull this off,” he told the FT.
Netflix Revises Offer Structure
Netflix recently changed its bid terms to address investor concerns. The streaming company switched from a stock-and-cash deal to an all-cash offer.
Peters emphasized this revision provides “greater deal certainty” compared to Paramount’s approach. He highlighted Netflix’s balance sheet strength as a key advantage in executing the transaction.
The all-cash structure aims to expedite deal closure. It also removes uncertainty for investors who were cautious about receiving Netflix stock as part of the purchase price.
Paramount hasn’t given up the fight. The company extended its hostile tender offer deadline to February 20.
This extension came shortly after Netflix announced its revised all-cash terms. The move suggests Paramount wants more time to convince Warner Bros Discovery shareholders to support its higher-priced but debt-heavy proposal.
The battle represents a major consolidation play in the entertainment industry. Warner Bros Discovery’s film and television studios include valuable intellectual property and production capabilities.
Netflix seeks only the studio assets under its $82.7 billion bid. Paramount’s $108 billion offer targets the entire Warner Bros Discovery company.
Peters appears confident in Netflix’s position despite Paramount’s higher dollar amount. His public comments suggest the streaming giant believes its financing approach and focused scope will ultimately win over shareholders.
Both companies declined to comment outside regular business hours. Warner Bros Discovery also hasn’t issued a public statement on the competing bids.
Paramount extended its tender offer deadline to February 20 following Netflix’s move to an all-cash structure.
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