Warner Bros asks investors to reject takeover bid from Paramount Skydance

NEW YORK AP Warner Bros is telling shareholders to reject a takeover bid from Paramount Skydance saying that a rival bid from Netflix will be better for customers We strongly believe that Netflix and Warner Bros joining forces will offer consumers more choice and value allow the creative public to reach even more audiences with our combined distribution and fuel our long-term upsurge Warner Bros commented Wednesday We made this deal because their deep portfolio of iconic franchises expansive library and strong studio capabilities will complement not duplicate our existing business Paramount went hostile with its bid last week asking shareholders to reject the deal with Netflix favored by the board of Warner Bros Paramount is offering per Warner share to Netflix s Paramount s bid isn t off the table altogether While Wednesday s letter to shareholders means Paramount s is not the offer favored by the board at Warner Bros shareholders can still decide to tender their shares in favor of Paramount s offer for the entire company including cable stalwarts CNN and Discovery Unlike Paramount s bid the offer from Netflix does not include buying the cable operations of Warner Bros An acquisition by Netflix if approved by regulators and shareholders will close only after Warner completes its previously informed separation of its cable operations Paramount has claimed it made six different bids that Warner leadership rejected before announcing its deal with Netflix on Dec Only after that did it take its offer directly to Warner s shareholders Beyond a greenlight from shareholders both takeover bids face tremendous regulatory scrutiny A change in ownership at Warner would drastically reshape the entertainment and media industry impacting movie making consumer streaming platforms and in Paramount s scenario the news landscape Critics of Netflix s deal say that combining the massive streaming company with Warner s HBO Max would give it overwhelming domain dominance whereas the Paramount streaming organization is far smaller This is something that we ve heard for a long time including when we started the streaming business Warner Bros declared in a securities filing Wednesday Our stance then and now is the same we see this as a win for the entertainment industry not the end of it Bids from both Netflix and Paramount have raised alarm for what they could mean for film and TV production While Netflix has agreed to uphold Paramount s contractual obligations for theatrical releases critics have pointed to its past business model and reliance on online releases Yet Paramount and Warner Bros are two of the big five legacy studios left in Hollywood nowadays Paramount s attempt to buy Warner s cable networks and news business would also bring CBS and CNN under the same roof In addition to further accelerating media consolidation that could raise questions about shifts in editorial control as seen at CBS News both leading up to and following Skydance s billion purchase of Paramount which it completed in August U S President Donald Trump has already been vocal about his future involvement in the deal indicating that politics will play a role in regulatory approval Trump previously announced that Netflix s deal could be a complication because of the prospective for an outsized control of the arena The Republican president also has a close relationship with Oracle s billionaire founder Larry Ellison the father of Paramount s CEO whose family trust is also heavily backing the company s bid to buy Warner Affinity Partners an venture firm run by Trump s son-in-law Jared Kushner previously stated it would investing in the Paramount deal too But on Tuesday the firm informed that it would be dropping out of the bid Still Trump also has a tendency to make decisions based on gut and his personal mood He has continued to publicly lash out at Paramount over editorial decisions at CBS Minutes For those people that think I am close with the new owners of CBS please understand that Minutes has treated me far worse since the so-called takeover than they have ever treated me before Trump wrote on his platform Truth Social on Tuesday If they are friends I d hate to see my enemies