Why Warner Bros. Discovery shareholders might opt for Paramount's offer
WBD shareholders must weigh pros and cons of tendering their shares to Paramount for $30 per share. CNBC lays out the arguments on both sides.
TL;DR
- Paramount is urging WBD shareholders to tender their shares for $30 each, an offer that includes a personal guarantee from Larry Ellison for equity funding.
- Shareholders must choose between Paramount's all-cash offer for the entire company and Netflix's bid for only the studio and streaming assets.
- Arguments for tendering to Paramount include a higher valuation, greater likelihood of regulatory approval compared to Netflix acquiring HBO Max, and the potential to force a bidding war.
- Reasons not to tender include skepticism about Paramount's financing, belief in the standalone value of Discovery Global's assets, and a desire to see if Netflix or another bidder will increase their offers.
- WBD's board has agreed to sell assets to Netflix but shareholders have the option to tender to Paramount, creating a conflict between the board's recommendation and a competing offer.
- The deadline to tender shares to Paramount is January 21, though it may be extended.