I said last week, after Netflix won the bidding war for Warner Bros. Discovery and its game studios, that the fight might not actually be over, and sure enough it is now on for real: Paramount Skydance, whose offer to acquire the company was rejected in favor of the Netflix bid, has launched a hostile takeover bid for WBD valued at more than $108 billion.
The deal between Netflix and Warner began to look shaky on Sunday when, as reported by AP, US president Donald Trump said it "could be a problem" because of the combined market share Netflix would be left with. Trump said the deal has to "go through a process and we’ll see what happens," presumably referring to required regulatory approvals, but added, "I'll be involved in that decision"—which is not how things are supposed to work, but here we are.
Less than 24 hours later, Paramount Skydance, headed by CEO David Ellison—son of ultra-rich guy and high-profile Trump supporter Larry Ellison—made its move. Paramount Skydance is offering $30 per share for Warner Bros. Discovery in an all-cash deal that, unlike the Netflix deal, includes the Global Networks division that was excluded in the Netflix deal.
I'm not a betting man, generally speaking, but if I was I'd be putting my money on Paramount coming out on top of this one. Not that I have any idea which offer is "better"—at some point the whole more billions thing becomes meaningless as anything more than a gauche ego-stroke—but a December 8 SEC filing indicates that Affinity Partners, the investment firm owned by Donald Trump's son-in-law Jared Kushner, is one of the deal's backers, and that is a significant advantage.
And Kushner isn't the only big Trump guy supporting Paramount's offer: Saudi Arabia's Public Investment Fund, headed by Crown Prince Mohammed bin Salman, is in on the action as part of a combined $24 billion commitment that also includes Abu Dhabi's L'imad Holding Company PJSC and the Qatar Investment Authority—despite recent reports that the PIF is cutting back on such things.
This will be at least the second time Kushner and bin Salman have worked together on a big-money buyout: They previously teamed up for Saudi Arabia's recent $55 billion buyout of Electronic Arts. Chinese tech giant Tencent was also set to back Paramount's Warner Bros. Discovery bid, but was removed as a financing partner over concerns that its presence could leave the proposed takeover subject to review by the Committee on Foreign Investment in the United States.
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