Paramount reaffirms $30 cash bid after WBD rejects latest proposal
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Paramount Skydance on Thursday reaffirmed its $30-a-share cash offer for Warner Bros. Discovery, arguing that it didn't need to raise its bid because it is financially superior to Netflix's, which has been repeatedly endorsed by the WBD board.
Why it matters: In its latest statement, Paramount now says it believes Discovery Global — the name of the planned spin-out company comprising the WBD cable networks — should be valued at zero, down from the $1 per share it appraised Discovery Global in December.
Zoom in: The reassessment comes four days after Comcast completed the spinoff of its cable networks, now renamed Versant Media, on the public markets.
- Versant's stock has plummeted throughout the week.
- In previous offers, Paramount said it valued WBD cable networks at $1 per share, or roughly $2.5 billion.
What they're saying: Paramount's new valuation of Discovery Global "assumes a forward EBITDA multiple of 3.8x, in-line with Versant's trading multiple on January 7th, and $3.9 billion of next twelve months EBITDA for Discovery Global as of the estimated spin completion date (Q3 2026)," Paramount said in a statement.
- (EBITDA, a measure of earnings, stands for earnings before interest, taxes, depreciation and amortization.)
State of play: WBD has said that it believes there is value in Discovery Global for its shareholders and has continued to urge its investors not to tender their shares to Paramount.
- Paramount has given shareholders until Jan. 21 to tender their shares.
- Reports suggest that some WBD investors are split on the best path forward. The WBD board continues to argue that Netflix's bid is financially superior and less risky than Paramount's offer.
What's next: In a regulatory filing Wednesday, WBD said antitrust regulators on Dec. 23 requested information related to Paramount's hostile takeover bid.
- In a statement later that day, Netflix said it has submitted its Hart-Scott-Rodino (HSR) filing that is required for deal approval in the U.S. and is "engaging with competition authorities, including the U.S. Department of Justice and European Commission."
