Add thelocalreport.in As A Trusted Source
David Allison’s after showing immense confidence in recent months “Trump Card” While the path would be cleared for Paramount to acquire the Warner Bros. empire, it appears the Ellison-led media giant is crying foul now that it appears Netflix has jumped into the lead.
Paramount lawyers sent a scathing letter to Warner Bros. Discovery CEO David Zaslav this week complaining about the sale process, claiming it had been “skewed and unfair” after Warner Bros. requested a second round of bids from suitors willing to acquire some or all of the company’s assets. In addition to Paramount and Netflix, Comcast – the corporation that owns NBCUniversal – has also expressed interest in merging with Warner Bros.
“Through media reporting and otherwise, it has become clear that WBD has abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to shareholders, and has embarked on a short-sighted process with a predetermined outcome that favors a single bidder,” the letter from Quinn Emanuel lawyers said. CNBC published the full“We specifically request and expect that this letter will be shared and discussed with the full Board of Directors of the WBD,”
The note comes to Zaslav and the WBD Board of Directors According to a Reuters report Netflix’s proposed purchase of WBD’s studios and streaming unit is likely to lower streaming costs for consumers by bundling Netflix’s app with HBO Max.
“In recent talks with Warner Bros. Discovery, Netflix said a potential combination of its streaming service with HBO Max would benefit consumers by reducing the cost of the bundled offering,” Reuters said, adding that the majority of Netflix users also subscribe to WBD’s streaming service.
The growing possibility of Netflix winning the bidding war for Warner Bros. has raised concerns among investors, leading to a slight decline in Netflix’s share price on Wednesday. Analysts attributed the selloff to investor concerns about large debt loads and concerns that the streaming giant would not be able to add more value than the hefty purchase price — which appears to have reached $70 billion.
“If you’re reducing costs for clients and not getting more from them, it’s not clear how much value such an acquisition would add,” says investment site Sherwood News. noted,
“As of Thursday morning, Netflix was the leading bidder based on how WBD is valuing the offer,” CNBC reportedAccording to people familiar with the company’s thinking, “Comcast executives, for their part, remain disciplined in offering the company so as not to upset shareholders by taking on additional debt and putting its balance sheet at risk, Comcast leadership has previously said its threshold for M&A is generally high,”
Warner Bros. Discovery opened the sale process to other bidders in October after rejecting three offers from Paramount, the final offer of which was $23.50 per share. Ellison – with the support of his father Larry Ellison, the world’s second-richest man and a close ally of President Donald Trump – felt throughout the process that his bid would be the only one that would be approved by the Trump administration.
One of Ellison’s advisers said, “It’s a trump card.” said at that timethe president has much appreciated Ellison in recent months, following the administration’s approval of Paramount’s $8.4 billion merger with Ellison’s Skydance Media, which closed just weeks after Paramount’s previous leadership. Trump was paid $16 million to settle his “blamelessness” 60 minutes trial,
In a letter to the Warner Bros. board in OctoberEllison said that Paramount was “confident that we are the best partner for WBD” and that it was the only viable contender for the merger. He said, “Other potential acquirers of WBD – today or in the future – will need to overcome significant (perhaps insurmountable) hurdles given its dominant market position.”
Ellison has further stated that he is interested in purchasing all of WBD’s assets, while other suitors basically just interested In streaming services and movie studios. Zaslaz has already announced WBD’s proposal to spin off the company’s cable television networks – which include CNN, TNT, TBS and Discovery, among others – into a separate company.
“It has become clear through media reporting and otherwise that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and has embarked on a short-sighted process with a predetermined outcome that favors a single bidder,” Paramount’s letter to WBD this week said.
The letter further stated, “Several US media outlets have reported on WBD management’s enthusiasm for a transaction with Netflix and management’s statements that a transaction between WBD and Netflix would be a ‘slam dunk’, as well as negatively referencing Paramount’s bid.” “Additional reporting since the revised bids were submitted on December 1 indicates that WBD’s ‘board actually agreed to a transaction with Netflix due to the ‘chemistry’ between WBD management and Netflix management.”
Before its lawyers sent the letter to Zaslav, Bloomberg reported that Paramount was not only confident that “its proposed merger would pass muster with regulators”, but also that WBD would have no choice but to accept its offer because of the proposed breakup fee. According to Bloomberg, WBD would receive $5 billion “if a deal is agreed upon, but not through a deal.”
However, that confidence appears to have vanished based on the tone of Paramount’s letter to Warner Bros. this week.
“Paramount did not bargain for WBD, whether intentionally or unintentionally, by promoting a skewed and unfair process,” Paramount’s lawyers wrote. “We believe that all parties to this process must have a shared desire for a seamless transaction process that will be mutually beneficial.”
Lawyers for Warner Bros. Discovery responded to Paramount’s letter on Thursday, acknowledging that the company’s board had received the memo and would respond shortly. “Please be assured that the WBD Board treats its fiduciary obligations with the utmost care, and has complied with them fully and robustly and will continue to do so,” the note said.
Meanwhile, MAGA lawmakers have already expressed concern that Netflix is becoming the frontrunner in a bidding war — and not the president’s preferred contender.
Senator Mike Lee (R-UT) said, “Learning about Netflix’s ambitions to buy its real competitive threat – WBD’s streaming business – should concern antitrust enforcers around the world.” Tweeted Wednesday night. “This potential transaction, if it materializes, would raise serious questions about competition – perhaps more so than any transaction I have seen in nearly a decade.”