Netflix’s acquisition of Warner Bros is complicated by Paramount’s keen & hostile bid
Paramount’s hostile takeover bid on Warner Brothers Discovery could stop or at least delay Netflix’s merging with WBD. Paramount’s CEO David Ellison is keen to buy Warner despite multiple rejections on WBD board’s concern about buyer financing risk. Backed by his father Larry Ellison of Oracle, David Ellison argues that his all-cash $30 per share deal on the entire WBD is better than Netflix’s plan in pricing, all-cash, regulatory approval, & industry benefit.
Although there is also some concern on Paramount’s high market-share of movie business if it takes over Warner Brothers but there is bigger antitrust concern on overall entertainment market as Netflix will have over 60% share of streaming business. Trump’s administration is clearly ‘concerned’ with Netflix’s market share and may favour the president’s friend Larry Ellison. Hollywood talent groups opposition is also severe worrying about Netflix’s future power over industry practitioners. As such, Netflix’s acquisition plan may take a long time and has a risk of falling apart in spite of WBD’s board support.
