Just three days after Netflix has officially announced an agreement to acquire Warner Bros. DiscoveryValuing Warner Bros. assets and the HBO Max platform at $83 billion ($72 billion excluding debt), a new player has reignited the bidding war. Paramount Skydance submitted a competing offer on Monday for the entire WBD group, with an overall valuation of 108,4 billion.
Paramount Skydance's approach differs radically from Netflix's. While Netflix primarily wants to acquire Warner Bros. Studios and the HBO Max streaming service, Paramount Skydance aims to acquire the entire conglomerate, including its vast portfolio of television channels. Before considering a sale, WBD had actually planned to spin off these channels, including CNN and Discovery, due to their more limited growth potential in a declining US cable market.
A financial offensive entirely in cash
Paramount Skydance is no stranger to this kind of bid. The group was the first to express interest in Warner Bros. Discovery and had already submitted at least five proposals before Monday's offer. Despite this, the WBD board of directors ultimately chose Netflix's offer, which was also preferred to that of cable operator Comcast.
To convince this time, Paramount Skydance claims to have the strongest offer. "Our offer is the highest among those on the table.""This is a significant development," stated David Ellison, the group's CEO, in an interview with CNBC. The company also indicated that its offer will be entirely cash-based, unlike Netflix, which planned a partial stock settlement.
Paramount Skydance's ability to raise such a sum relies in part on the Ellison family fortune. The patriarch, Larry Ellison, is among the richest men in the world, with a net worth estimated at $270 billion according to Forbes. "We are more certain of obtaining regulatory approval than Netflix."David Ellison added.
Political pressures and concerns about competition
The operation conceived by Netflix is also beginning to raise political questions. At an event in Washington, Donald Trump expressed reservations about a Netflix-Warner Bros merger, noting that Netflix already owns "a very large market share", what "could be a problem."
Such an operation would create a giant combining two of the three largest global paid streaming services, excluding Amazon Prime, with a hybrid model, totaling more than 300 million subscribers for Netflix and 128 million for HBO Max.
