4 hours ago - Business
Investors still aren't all sold on Paramount-WBD deal
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Warner Bros Discovery shares continue to trade at a discount to the $31 per share takeover price that was agreed to last week with Paramount Skydance.
Zoom in: The best explanation is that some investors remain wary of regulators scuttling the deal — with lots of focus turning toward California.
- Some may also remain skeptical of Paramount's financing, despite the tight terms.
State of play: Paramount on Friday cut a $2.8 billion check to Netflix — covering WBD's termination fee.
- If the skeptics are correct about Paramount's deal faltering, it's theoretically possible that Netflix could return with the same (or lower) bid, plus $2.8 billion of Ellison cash in its bank account.
The bottom line: An alt scenario is that Netflix kicks tires on another studio like Lionsgate, although CEO Ted Sarandos called that "unlikely" in a portmortem Q&A with Bloomberg.
- Sarandos added, when asked if he expects Paramount to sell less content to Netflix: "If they are six or seven times levered, they need to make some money, and we're buyers. So I can't imagine that's going to be a problem."
