Warner Bros. has officially rejected Paramount’s first offer to buy the media and entertainment corporation.
In a new report by Bloomberg, Warner Bros. Discover Inc. has rejected Paramount Skydance Corp’s initial offer for “being too low”. Paramount’s offer is around $20 per share, and currently, the media giant is estimated to be worth over $42 billion with $17.10 shares.
Paramount’s CEO, David Ellison, is allegedly relentless in his pursuit to purchase Warner Bros and is said to be increasing his bid by finding additional backing and heading directly to shareholders. Paramount shares are currently at $17 a share and are valued at $18.6 billion.
Ellison took over Paramount earlier this year after completing an $8 billion merger with his film production company, Skydance Media. Paramount is the parent company of CBS, Nickelodeon, and MTV.
The CEO of Warner Bros. Discovery is David Zaslav as of 2022 and has previously stated, “We expect sometime in April that the companies will be split,” in a discussion with investors at a Goldman Sachs media conference.
The renamed company, after Zaslav’s planned split, will include Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max. Zaslav stated that this is essential to focus on particular assets.
Paramount is currently considering a new asset manager, Apollo Global Management, to support its bid. If Paramount is successful in its purchase, then two of the biggest Hollywood studios would be a major competitor for media giants such as Disney and Netflix.
Zaslav’s performance as the CEO of Warner Bros. has been called into question, with many of his business decisions being scrutinized, including the company’s $50 billion debt after Discovery’s $43 billion merger with WarnerMedia.
It’s unclear what Zaslav’s intended split of Warner Bros. will mean for Ellison’s expected takeover. Zaslav has reportedly valued the company’s studios and streaming entities at $30 per share, which is a significant increase from Paramount’s initial bid.
There have been rumors circling regarding other potential buyers following Paramount’s interest, including Amazon and Netflix. However, Amazon’s purchase of MGM didn’t provide great results for the streaming giant, so another major purchase so soon wouldn’t be viable.
Despite other interested parties, the only one with a solid plan and conviction is Ellison’s Paramount bid, but if the price isn’t raised, then it could potentially lead to a scramble to the finish line.