After Paramount makes an aggressive play to acquire WB/D, the Netflix CEO admits this was expected but still confident in deal. As you probably already know Netflix won an official bidding process in the past week or so. Essentially Netflix deal is as follows. $82 Billion+ for Warner Bros., and Discovery becomes a separate company and is not part of the deal. Those in charge at WB/D have selected this deal as the one they want and as such Netflix are now in an exclusivity period.
Yet, Paramount, who have been very public in their pursuit of WB/D have decided to go full Nuclear. Essentially, they are telling the shareholders that their deal is better value. Roughly speaking Paramount are offering $100B+ for the entire company including Discovery. In other words they are appealing directly to the greed of current WB/D shareholders. Paramount are offering roughly $30 per share, the Netflix deal worth only $27.50 per share.
As per Deadline, Netflix CEO Ted Sarandos says this move from Paramount was just what they expected. However, he remains confident that the deal they have in place is the one that suits both parties best.
“Today’s move was entirely expected,” Sarandos said at a conference in New York hosted by Wall Street bank UBS. “We have a deal done, and we are incredibly happy with the deal. It’s great for shareholders, great for consumers. We think it’s a great way to create and protect jobs in the entertainment industry. We’re super confident we’re going to get it across the line. So we’re set.”
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‘Sarandos opened the planned 35-minute session with the comments, which came in response to UBS media analyst John Hodulik’s straightforward question about the Paramount news. “What are your thoughts?” Hodulik asked, and the room broke out in laughter as the buzzed-about topic surfaced.’
So what will happen? Well, unless WB/D shareholders start to kick up a fuss about any missing cash, Netflix’s deal will progress. There may be a variety of reasons why WB/D’s board prefer the Netflix option. Now, unless their decisions angers their own shareholders who disagree, there’s not much Paramount can do. That being said, Paramount does seem a little desperate and therefore may do something which WB/D can’t ignore. It’s tricky though. Paramount really should have offered more during the bidding phase. This leaves Paramount looking at an aggressive takeover as opposed to an agreed purchase/merger.
Chances are, WB will still become part of Netflix and Paramount won’t be interested in Discovery on it’s own. However, watch this space as business is business, so who knows till the money changes hands?
Thoughts below.
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