Breaking News: Paramount Skydance Has Launched a New Bid for WBD

🌟🌟🌟Paramount Skydance $Paramount Skydance Corp(PSKY)$ has launched a hostile bid to buy $Warner Bros. Discovery(WBD)$  with an all cash USD 30 per share offer.    This is even better than Netflix's offer of USD 27.75 which includes USD 23.25 in cash and USD 4.50 in Netflix stock.

Why Paramount's Offer Is Better?

1.  Higher price and Certainty:  Paramount's all cash bid of USD 30 per share is a clear , higher valuation than Netflix's cash and stock offer of USD 27.75.  The all cash nature removes the risk associated with potential fluctuations in Netflix's share price before the deal closes .

2.  Lower Regulatory Hurdles: The Netflix/ WBD deal has drawn sharp criticism and promise of antitrust scrutiny from lawmakers and industry groups due to the combined streaming market share it could create.  

Paramount argues that its proposal would face fewer regulatory obstacles , offering a more certain and quicker path to completion.

3.  Simpler Transaction: Paramount's bid is for the entire WBD company whereas the Netflix's deal requires WBD to first spin off its Global Networks division (Discovery Global) into a separate publicly traded company, adding complexity to the transaction.

4.  Industry Support: Paramount claims that its vision is Pro Hollywood , Pro competition and Pro consumer .  It has promised to maintain theatrical releases, which has received support from theatre owners and creative unions concerned about Netflix's streaming first model.

My Take

As a shareholder of WBD seeking maximum value and reduced risk , I believe that the Paramount all cash offer is a superior proposition.

According to WBD board of directors which has previously endorsed the Netflix's deal, they will carefully review and consider the Paramount offer and advise shareholders on their recommendation within 10 business days .

Market Reaction 

Following the announcement of the bid, $Warner Bros. Discovery(WBD)$  jumped 4.5% reflecting the bidding war.  Netflix $Netflix(NFLX)$  fell 3%, likely due to concerns over the increased competition and regulatory uncertainty.  $Paramount Skydance Corp(PSKY)$ is up 7%.

Concluding Thoughts 

From a WBD shareholder's perspective, the choice is clear : Paramount Skydance has presented the superior offer.  This bidding war between Paramount Skydance and Netflix creates a favourable environment for WBD shareholders as competition for the acquisition can drive up the final price.

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