Zhi Tong Cai Jing·2025-12-16 23:59Core Viewpoint - Warner Bros. Discovery (WBD) plans to reject Paramount Global's hostile takeover bid due to concerns over financing arrangements and other terms, believing that its existing agreement with Netflix (NFLX) offers superior value and certainty [1][4] Group 1: Warner Bros. Discovery's Position - Warner Bros. Discovery's board will urge shareholders to reject Paramount's offer after evaluating the bid, citing concerns about the reliability of Paramount's financing and operational flexibility during the potential sale process [1][4] - The board is particularly worried about the implications of a year-long regulatory approval process on its ability to operate independently [2][4] - Warner Bros. has agreed to a deal with Netflix at a price of $27.75 per share, valuing the company at approximately $83 billion, while Paramount has proposed a higher bid of $30 per share, valuing Warner at over $108 billion [3][5] Group 2: Paramount Global's Bid - Paramount's financing plan has faced scrutiny, especially after a key investor, Affinity Partners led by Jared Kushner, withdrew support for the deal, raising concerns about the stability of the financing structure [2][4] - Paramount has made adjustments to its bid in response to Warner's concerns, including addressing issues related to refinancing debt and a $5 billion breakup fee [2][5] - Despite offering a higher cash price, Paramount's bid is seen as carrying execution risks due to financing uncertainties and potential regulatory hurdles [5][6] Group 3: Implications for Netflix - If successful in acquiring Warner Bros., Netflix would significantly enhance its content library, transitioning from a platform-based model to an integrated powerhouse with top-tier production capabilities and a vast IP portfolio [6][7] - The acquisition would allow Netflix to control high-value content that it currently licenses, thereby strengthening its competitive position in the streaming wars [6][7] - Key IPs that Netflix would gain include popular franchises such as Harry Potter, DC Universe, and HBO's acclaimed series like Game of Thrones [7]