Zhi Tong Cai Jing·2025-12-16 23:48Core Viewpoint - Warner Bros. Discovery (WBD) plans to reject the hostile takeover bid from Paramount Global (PSKY) due to concerns over financing arrangements and other terms, believing that their existing agreement with Netflix (NFLX) offers better value and certainty [1][4] Group 1: Warner Bros. Discovery's Position - Warner Bros. board intends to advise shareholders to reject Paramount's offer after evaluating the bid, citing concerns about the reliability of financing and operational flexibility during the potential sale process [1][4] - The board is particularly worried about the financing structure proposed by Paramount, which is backed by a trust associated with Oracle founder Larry Ellison, as it is revocable and could lead to a lack of recourse for Warner Bros. [1][2] - Warner Bros. initially agreed to sell its studio and streaming business to Netflix for $27.75 per share, valuing the deal at approximately $83 billion, while Paramount's offer is $30 per share, valuing the company at over $108 billion [3][6] Group 2: Paramount Global's Offer - Paramount's bid includes a $5 billion breakup fee backed by the Ellison family, but Warner Bros. finds the flexibility to operate and manage its balance sheet insufficient [2][4] - Affinity Partners, led by Jared Kushner, withdrew support for Paramount's bid, raising concerns about the stability of the financing sources [2][4] - Paramount has made adjustments to its offer in response to Warner Bros.' concerns, but the withdrawal of Tencent's $1 billion financing due to regulatory concerns has further complicated the situation [2][5] Group 3: Implications for Netflix - If Netflix successfully acquires Warner Bros., it will significantly enhance its content library, transitioning from a platform-only model to an integrated model with top-tier studios and IP [6][7] - The acquisition would allow Netflix to control high-value content that it previously needed to license, thereby strengthening its competitive position in the streaming wars [6][7] - Warner Bros. has a rich portfolio of popular IPs, including franchises like Harry Potter, DC Universe, and HBO's acclaimed series, which would bolster Netflix's content offerings [7]