Xin Lang Cai Jing·2025-12-22 09:15Core Viewpoint - The acquisition process of Warner Bros. by Paramount is facing significant challenges, with concerns raised about its fairness and adequacy, leading to a potential loss of the deal to Netflix [1][2]. Group 1: Acquisition Process and Stakeholder Reactions - Paramount's CEO David Ellison has been pursuing the acquisition of Warner Bros. for several months but is now worried that the deal may fall through due to recent missteps [1][2]. - Warner Bros. CEO David Zaslav and his team were surprised by the legal letter from Paramount, believing their acquisition process was fair [1][2]. - Following the legal letter, Ellison's team quickly recognized the mistake and submitted a revised acquisition proposal the next day [1][2][3]. Group 2: Competitive Landscape and Market Reactions - Netflix has reached an agreement to acquire Warner Bros., a significant player in Hollywood, after Paramount's mismanagement weakened its competitive position [2][3]. - Ellison has made a direct offer to shareholders at $30 per share, hoping to overturn the board's decision in favor of Netflix [2][3]. - Analysts note that Ellison must increase his offer to be competitive, as Warner Bros. stock has dropped 15% in the past month, raising concerns among shareholders [2][3][5]. Group 3: Financing and Regulatory Concerns - Ellison's fifth proposal included funding from various sources, but concerns over national security led to the withdrawal of Tencent from the investment [3][10]. - Paramount has not provided satisfactory proof of financing to Warner Bros., which has hindered the acquisition process [3][10]. - Ellison's family has a strong reputation in the market, but doubts about their financing capabilities persist, complicating the acquisition efforts [7][10]. Group 4: Strategic Positioning and Industry Implications - Ellison is advocating for his acquisition proposal by highlighting the potential anti-competitive nature of Netflix's acquisition, arguing it could harm the entertainment industry's ecosystem [4][11]. - The board of Warner Bros. has recommended that shareholders reject Ellison's offer, stating that the claimed cost savings from a merger would weaken Hollywood rather than strengthen it [5][11]. - The market's initial shock regarding Netflix's acquisition has begun to subside, with industry leaders working to reassure partners and stakeholders [12][13].