Paramount challenges Netflix with a hostile takeover bid for Warner Bros Discovery

The struggle between Paramount and Netflix through the control of Warner Bros Discovery (WBD) has become the The biggest corporate soap opera of the moment in Hollywood and in international markets. What began as a closed agreement between Netflix and Warner has transformed into a veritable battle of bids, political pressures, and regulatory uncertainties which can redefine the global map of entertainment and streaming.

In just a few days, the sector has gone from taking it for granted that Netflix would keep the studios and HBO Max to contemplate a much more uncertain scenario, in which Paramount bursts in with a hostile takeover bid of greater economic value and with the aim of acquiring the entire conglomerateFor Warner shareholders and regulators, the dilemma is no longer just who pays more, but Which model of media concentration do you consider acceptable?.

Paramount's offer: a hostile takeover bid, all cash, and for 100% of WBD

Paramount has decided to go all out and has launched a hostile takeover bid valued at approximately $108.000 billion, including debt, to buy all of Warner Bros. Discovery. The company will approach WBD shareholders directly with a proposal in cash of $30 per share, clearly above the $27,75 of the offer previously agreed with Netflix.

The big difference isn't just in the price, but in the scope of the operation. While Netflix focuses on Warner's film studios and streaming business, with HBO Max and its catalogParamount's takeover bid also includes cable channelsThese include CNN, TNT, HGTV, Cartoon Network, TBS, Food Network, and Discovery. In other words, comprehensive control of the group, from film and digital platforms to traditional television.

According to the group itself, Paramount's proposal represents a significant opportunity for WBD investors. about $18.000 billion more in cash that the deal agreed with Netflix. The company maintains that, after three months of negotiations and up to six formal offers, Warner showed no real willingness to explore its proposals, which has now led to go directly to the market and to the board of directors to force the debate.

The deal would value WBD well above the approximately 83.000 billion which involved the Netflix deal, including debt. Despite Paramount's relatively smaller market capitalization, the company claims to have sufficient funding to support an acquisition of this magnitude.

Netflix's previous deal: studios, HBO Max, and less cable exposure

Until last Friday, the dominant narrative was different: Netflix had won the bid for Warner Bros after an auction process of about three months. The giant of streaming covenant the acquisition of Warner's studios and its streaming business, including the HBO Max platform, in a cash and stock agreement valued at $27,75 per share, which gives the transaction an enterprise value of approximately $82.700 billion.

That transaction left out cable television networks, such as CNN, Discovery Channel, TNT, or HGTV, which Warner planned to spin off into a separate entity. The design of the agreement allowed Netflix to strengthen its position in high-profile content—franchises such as Harry Potter or the DC Comics universe, in addition to the HBO catalog— without assuming the complex legacy of the linear cable business, in decline but still relevant.

The schedule agreed with Netflix stipulated that The closing of the operation was delayed between 12 and 18 monthsPending approval from US and international regulators and the completion of Warner's internal separation of its cable business. A structure that combined cash and stock and which, according to the WBD board, provided greater execution security compared to other alternatives.

In the markets, the initial shock of the Netflix deal translated into Warner shares riseWhile Netflix's stock price reacted somewhat more cautiously to the scale of the merger and the impending antitrust scrutiny, that apparent equilibrium has been shattered by Paramount's move.

How the two operations compare: price, scope, and risks

The comparison between the proposals of Paramount and Netflix It's not as simple as looking at the share price, because each company is built on a different asset portfolio and a different financial structure. Even so, some elements help to understand the clash of strategies.

First, the economic componentParamount is offering $30 per title, all in cash, compared to Netflix's offer of $27,75, which mixes money and stocksParamount insists that this means more immediate value and much less risk for shareholders, as they would not depend on future stock market performance or a "complex and volatile" combination of cash and paper.

Second, the acquired business scopeParamount's hostile takeover bid encompasses the entire WBD conglomerate: film studios, HBO Max, other streaming services, and global cable channels. Netflix's bid excludes the linear television block, which would continue operating under another company. Thus, while Netflix is ​​betting on strengthening its digital core, Paramount proposes a huge vertical group, with a presence in all links of the audiovisual business.

The third axis is the regulatory riskParamount maintains that its plan would be more likely to succeed before competition authorities because it would, in its view, greater diversity in the streaming marketIn their argument, if Netflix absorbs the studios and HBO Max, the leadership of the giant of streaming It would be strengthened to levels that could make regulators uncomfortable..

Netflix, for its part, leaks that it feels comfortable with the political and regulatory climate Regarding the deal, it was noted that the possibility of receiving alternative offers had already been anticipated. Sources close to the company emphasize that the agreement's design, which excludes a significant portion of the cable service, is specifically intended to facilitate antitrust approval and prevent excessive concentration of media power.

Trump, Ellison and the political dimension of the media battle

The Paramount-Netflix fight isn't just being played out in the companies' offices: it also has a strong political burden in the United Stateswith Donald Trump's name constantly appearing in the equation. The former president has stated that Netflix's purchase of Warner's assets "could be a problem" because of the enormous combined market share that the new giant would achieve.

Trump has even claimed that will participate in the review of the deal and has hinted at the possibility of using federal regulators to issue vetoes or impose stringent conditions. Although he has also publicly praised Ted Sarandos, Netflix's CEO, the message that the agreement "increases market share too much" puts additional political scrutiny on the transaction.

In parallel, the shareholding structure of Paramount Skydance introduces another derivative. The group is controlled by David Ellison, son of Larry Ellison, founder of Oracle and one of the world's richest people, with close ties to TrumpThe purchase of Paramount last year — for about $8.000 billion — allowed Skydance to acquire networks such as CBS, MTV, Nickelodeon, and Comedy Central. consolidating a new media empire with a clear ideological shift towards conservative positions.

Industry sources suggest that if Paramount were to acquire Warner as well, the group would gain control Two major news brands: CBS and CNNThis raises concerns within parts of the media and political ecosystem about the potential loss of editorial independence and the strengthening of a pro-Trump stance on major news channels.

At the same time, the US president's inner circle has been particularly hostile toward Netflix in recent years, with constant criticism from the MAGA universe And figures like Elon Musk frequently criticizing the platform. All of this fuels the perception that, beyond money, this battle also involves... balances of media and narrative power in a year of enormous political tension in the United States.

Who pays for the party: sovereign wealth funds, debt and multimillion-dollar penalties

For a company with a market capitalization far lower than that of its rival — Paramount is around 14-15.000 million dollars Compared to Netflix's $400.000 billion investment, financing a takeover bid of over $100.000 billion requires careful planning. The hostile takeover relies on several pillars of equity and debt, which are also generating debate about the entry of foreign investors in such a sensitive media asset.

Paramount has detailed that the The Ellison family and the RedBird Capital Partners fund They back approximately $40.700 billion in capital. The remainder of the financing is completed with sovereign wealth funds of Saudi Arabia, Abu Dhabi and Qataras well as with Affinity Partners, the investment vehicle led by Jared KushnerTrump's son-in-law. In addition 54.000 billion in debt commitments contributed by Bank of America, Citigroup and Apollo Global Management.

To try to allay political and national security concerns, Paramount asserts that these foreign investors have relinquished governance rightsincluding seats on the board of directors. The company maintains that this minimizes the risk of the Committee on Foreign Investment in the United States (CFIUS) or similar bodies blocking the transaction for strategic reasons.

The Netflix agreement with Warner also incorporates a dense network of break clauses which limits WBD's room for maneuver. If Warner decides to abandon the agreement with Netflix and accept Paramount's offer, it will have to pay the platform streaming a penalty of about 2.800 billion dollarsConversely, if the problem arises from Netflix failing to obtain regulatory approval or withdrawing, the compensation would amount to 5.800 million in favor of Warner.

The existence of these multi-million dollar compensation packages makes any change of course a delicate move for the WBD board, which must weigh not only the face value of the offers, but also the cost of breaking agreements already signed and the length of time the assets could remain locked in a regulatory limbo.

Impact on the global streaming market and the European industry

Although the battle is being fought on an American scale, the outcome will have direct consequences for Europe and SpainIn the US, Netflix and Warner Bros.—and, to a lesser extent, Paramount—are key players in the production and distribution of audiovisual content. Control of the HBO Max catalog, Warner Bros. film franchises, and their licensing agreements could significantly alter the offerings available on streaming platforms and television networks across the continent.

If Netflix ends up integrating Warner's assets, the European market of streaming I would see how the main operator further strengthens its positionAdding to its already extensive catalog the historical weight of Warner Bros. and HBO series. This could lead to greater competitive pressure on platforms already established in Europe, such as Amazon Prime Video, Disney+ or SkyShowtime (where Paramount participates), and in a renegotiation of broadcasting rights and exploitation windows in cinemas and pay television.

In Spain, where Netflix and HBO Max have been key drivers of original series production and co-productions with local companies, the industry is closely watching which model prevails. A full acquisition of Warner by Netflix could facilitate this. direct releases on streaming platforms and shortening theatrical windowsThis worries exhibitors and part of the industry, which is already suffering from competition from domestic consumption.

Paramount, for its part, argues that its proposal would contribute to to maintain a more competitive ecosystem in Hollywood and, by extension, in international markets, with more strong players competing for content and theatrical releases. David Ellison himself has insisted that his acquisition would result in “a stronger Hollywood,” with greater investment in cinema and more films in theatersThis argument resonates with the demands of European producers and theaters who insist on not losing touch with the traditional premiere.

In any case, both the European regulator and the competition authorities of countries like Spain will closely monitor the operation due to its potential impact on the concentration of rights, the diversity of content, and the negotiating power of local production companies versus these large conglomerates. The outcome could influence production agreements, licensing of Spanish series, and distribution deals for the next decade.

A long standoff, with a war of narratives and a reaction from the markets

Since Paramount made its hostile takeover bid public, the conflict has also moved to communicative fieldThe company accuses Warner's board of accepting an "inferior proposal" and undervaluing Global Networks' cable business, which includes its linear television channels. In its view, the deal with Netflix rests on an "illusory prospective valuation" of that asset, further burdened by high financial leverage.

Netflix, in turn, maintains that Paramount It lacks the financial muscle necessary to complete a purchase of this size with guarantees without putting too much weight on foreign capital and debt, and raises doubts about the national security implications of Middle Eastern sovereign wealth funds becoming relevant players in a large US media group.

In the documents submitted to the market, Paramount insists that the takeover bid is fully supported by firm funding commitments and that all partners have accepted conditions designed to circumvent regulatory hurdles. Furthermore, the company has set a deadline: the public offering will expire on January 8, 2026Unless it is extended, which leaves more than a year of open conflict if the situation is not resolved before then.

Meanwhile, the stock market reaction The reaction was immediate. Shares in Warner Bros. Discovery and Paramount rose between 5% and 8% in the first few hours after the hostile takeover bid was announced, reflecting expectations of a possible improvement in conditions for shareholders. Meanwhile, Netflix shares registered declines between 3% and 4%, in a context of greater uncertainty about the viability and timing of the operation initially agreed.

Some analysts compare this standoff to major hostile takeovers in Europe—such as BBVA's bid for Sabadell in Spain—to emphasize that, even if more money is offered, The highest bid doesn't always win.But the one that combines the best price, lowest risk, and greatest regulatory clarityThat will likely be the framework in which shareholders and regulators will assess the path Warner and its vast content catalog take.

What's at stake is not just who gets to keep a historical icon like Warner BrosBut what kind of media concentration is allowed in the midst of the streaming wars, how much leeway is given to political and financial influence in large audiovisual groups, and how power will be redistributed in a sector that directly affects the cultural offering in Europe, Spain, and the rest of the world.