Summary
Investors in Warner Bros Discovery are divided over an improved offer from Paramount to buy the company. Paramount's offer is higher, but Warner Bros believes their deal with Netflix is better because Paramount's proposal could lead to too much debt for the combined company. Investors have until January 21 to decide on the Paramount offer.
Key Facts
- Paramount has proposed to buy Warner Bros for $108.4 billion, offering $30 per share.
- Warner Bros has an existing agreement with Netflix, and believes this deal is more reliable despite being lower at $82.7 billion, at $27.75 per share.
- Warner Bros says accepting Paramount's offer would leave them with $87 billion in debt.
- There is a $2.8 billion fee to break their deal with Netflix, plus $1.5 billion in fees owed to bankers and another $350 million in financing costs.
- Some investors, like Harris Oakmark and IHT Wealth Management, support the board's decision to reject Paramount's offer.
- Others, like Pentwater Capital Management and Gabelli Funds, argue for accepting Paramount's offer, seeing it as simpler and quicker to pass regulatory approval.
- Major investors in Warner Bros, such as Vanguard, State Street, and BlackRock, also hold shares in both Paramount and Netflix.
