Warner Bros. will likely move forward with Netflix’s offer instead of Paramount’s massive counter-bid.

If this holds, it would lock in one of the biggest entertainment deals in history and completely reshape the future of DC, HBO, and some of the world’s biggest franchises.

Paramount has criticized Netflix’s offer and said its own counterbid is worth up to $18 billion more in cash. The earlier Netflix offer had also been criticized by US President Trump.

US production company Paramount said on Monday that it was looking to challenge Netflix’s takeover of Warner Bros. Discovery (WBD) with a hostile bid of its own.

What are the facts of the Warner Bros. offers?

Netflix offered to buy part of WBD for $82.7 billion, including WBD’s debt
Netflix would pay $23.25 per share, plus $4.50 worth of Netflix stock
This comes to an equity value of $72 billion
Paramount is offering to purchase the entire WBD company for $108.4 billion
Paramount said it would pay $30 per WBD share, an increase of $18 billion for shareholders

What has Paramount said about the Warner Bros. offer?

Paramount said its offer for the entire Warner Bros. Discovery is better than Netflix’s, providing more cash for shareholders and a more straightforward regulatory approval process.

What’s more, unlike Netflix, Paramount says it is also offering to buy the cable assets of Warner Bros., and asking shareholders to reject the Netflix bid which it says is based on an “illusory prospective valuation” of those assets.

Paramount criticized the Netflix offer, saying it “exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process with an uncertain outcome along with a complex and volatile mix of equity and cash.”

Whoever is successful with their bid will take ownership of some of TV’s biggest names, including the Game of Thrones seriesImage: HBO/AP/dpa/picture alliance
Paramount said it had submitted six proposals to WBD over a 12-week period.

“We believe our offer will create a stronger Hollywood. It is in the best interests of the creative community, consumers and the movie theater industry,” Paramount Chairman and CEO David Ellison said in a statement.

“We believe they will benefit from the enhanced competition, higher content spend and theatrical release output, and a greater number of movies in theaters as a result of our proposed transaction,” he added.

What will happen to the Netflix offer?

Netflix and WBD had agreed to the former’s offer, but Paramount has come in with a hostile bid directly targeting the shareholders.

The company’s CEO Ted Sarandos said the Paramount offer was “entirely expected,” but the news could already be felt in the stock market.

On Monday, Netflix shares were down 4%, while Paramount’s were up 7.3% and those of WBD rose 5.3%.

Paramount is likely to urge shareholders and politicians to sink the Netflix deal. It had already triggered concerns about online streaming monopolies, since it would leave Netflix, the number one streaming platform, owner of HBO Max, the third biggest streaming platform.

But US Senator Elizabeth Warren has also raised the alarm about a Paramount deal, saying the hostile bid “is backed by a who’s who of Trump buddies … raising serious questions about influence-peddling, political favoritism, and national security risks.”

What has Trump said about the deal?

US President Donald Trump also said Sunday that the Netflix deal “could be a problem” because of the size of the combined market share.

The president added that he would be personally involved in the federal government’s decision to approve the bid or not.

Trump has personal ties to Paramount, with CEO Ellison being the son of longtime Trump ally and megadonor Larry Ellison.

The Paramount offer includes financing from Affinity Partners, which belongs to Trump’s son-in-law Jared Kushner, as well as from Saudi, Qatari and UAE backers.

“He said he’s going to be involved in the decision we should take him at face value,” said Usha Haley, a Wichita State University professor who specializes in international business strategy.

“For him, it’s just greater control over the media.”