Paramount Makes Hostile Bid To Acquire Warner Bros Against Netflix - Which Deal Is More Hollywood Friendly? EXPLAINED

Netflix

is not getting to acquire Warner Bros. Discovery easily. It just got a hostile bid for the deal, and now things seem a tad difficult for the streamer. After Netflix announced of locking the deal to take over Warner Bros. at $83 billion last week, a new player has stepped in. Paramount Skydance has launched a hostile bid at $108 billion, looking to derail Netflix's plan. The offer includes wealth funds from multiple countries in Middle East, along with other offers. This comes as Netflix has been facing a backlash over the same deal from Hollywood and other industry workers.ALSO READ: Netflix-Warner Bros Acquisition Deal Faces Huge BACKLASH From Hollywood Guilds: It'll Eliminate Jobs, Creative Rights...

Paramount makes a hostile bid

On December 10, David Ellison-led Paramount Skydance kicked off an all-cash direct tender offer to acquire all of the outstanding shares for $30 per share to take control of Warner Bros, including its traditional television networks. Paramount called the poposal a "superior alternative" against Netflix, as it promises to deliver more cash upfront to shareholders and greater prospect of approval by regulators.This is Paramount's second attempt after making the same offer on December 4. The offer includes the entirety of Warner Bros. Discovery, including the TV business with CNN, TBS, TNT and other networks. But since Paramount isn't as big a player as Netflix, despite proposing a deal a few months ago, Warner Bros., owner of HBO formally opened a bidding process, making way for Netflix. However, given Hollywood's disapproval towards Netflix's deal, Paramount is trying its hand again.

How are both the offers different?

However, both Netflix and Paramount's offers are different. Netflix's proposal targets Warner Bros.' studio and streaming networks while leaving the rest of the assets as an independent company. These include brands like Warner Bros., New Line Cinema, and HBO Max, at $82.7 billion, including debt. The streamer's offer is to pay $23.25 per share, and grant Warner Bros. a stake in the new company. This mix of cash and equity will stand at around $27.75 per share.Meanwhile, Paramount looks to control the entire company, including its classic pay-TV networks, which have been faltering in business for a while. Its offer is to pay $30 per share, in an all-cash offer, and this direct deal with the shareholders is a more certain plan than Netflix. Paramount's entire deal values Warner Bros. at $108.4 billion, including $24 billion from Saudi Arabia, Qatar and Abu Dhabi wealth funds, and Affinity Partners by Jared Kushner.

Paramount's promise to save Hollywood

Paramount has vowed to release more than 30 movies in theaters annually if it beats Netflix in acquiring Warner Bros. Discovery. Ellison told Dealine, "Including the Writer’s Guild of America have already issued a statement that a deal must be blocked. Hollywood legends, like James Cameron and Jane Fondant have spoken out, describing the (Netflix) deal as a disaster for theatrical films. Paramount’s proposal provides vastly superior certainty and projections for WBD’s shareholders and the Hollywood community.""Paramount is committed to growing the film and TV output of both businesses, including a theatrical slate of 30 plus theatrical releases per year. We’re going to satisfy the needs of the moviegoing public," he added.ALSO READ: 15 Classic TV Shows, Films That Netflix Will Own After Warner Bros Deal

How did Netflix react to Paramount's bid?

In the light of Paramount's involvement, Netflix co-CEOs Ted Sarandos and Greg Peters expressed confidence in their plan, asserting that a Netflix takeover of Warner Bros. and HBO Max would "create and protect jobs in the entertainment industry."Speaking at the UBS Global Media and Communications conference, as reported by Variety, Sarandos said, "We have a deal done, and we are incredibly happy with the deal. We think it’s great for our shareholders. It’s great for consumers. We think it’s a great way to create and protect jobs in the entertainment industry. We’re super confident we’re going to get it across the line and finish."ALSO READ: 'We're Saving Hollywood' - Netflix REACTS To Backlash Over Warner Bros Acquisition, Says It 'Understands Business'Reacting to the ongoing disapproval from Hollywood guilds, Netflix stated that the business module of Warner Bros, won't get affected for its massive TV studio, including it selling shows to hostile streamers and networks in addition to serving Netflix and HBO Max.