A key shareholder of Warner Bros. Discovery, Harris Oakmark, told Reuters that Paramount-Skydance's latest acquisition offer for the company remains unsatisfactory.
As of the end of September, Harris Oakmark holds 96 million shares of Warner Bros., representing about 4% ownership, making it the fifth-largest shareholder. The firm explicitly stated it would continue waiting for Paramount, controlled by the Ellison family, to improve its terms.
Alex Fitch, Harris Oakmark’s portfolio manager and head of U.S. research, said in an email to Reuters: "Paramount’s revised offer, while making necessary adjustments, still falls short. In our view, both bids have their pros and cons, and altering the acquisition plan mid-process comes with costs. If Paramount truly wants this deal, it must provide more compelling incentives."
Earlier this week, Paramount adjusted its hostile takeover bid for the legendary Hollywood studio, setting the offer at $108.4 billion while refining its financing plan. Paramount is effectively controlled by David Ellison, son of Oracle co-founder Larry Ellison, who has personally guaranteed $404 billion in financing to facilitate the acquisition of Warner Bros., which owns the HBO Max streaming platform and major IPs like "Harry Potter," "The Lord of the Rings," and "Superman."
Previously, some of Paramount’s financing was held in a revocable trust, raising concerns among Warner Bros. investors about the offer’s reliability. Additionally, Paramount increased the breakup fee—payable if regulators block the deal—from $5 billion to $5.8 billion to match a competing bid from streaming giant Netflix. However, it did not raise its $30-per-share offer price.
**"Premium Media Assets" Spark Bidding War** The deadline for Warner Bros. shareholders to decide on the acquisition offers has been extended from January 8 to January 21.
On Wednesday, Warner Bros.’ board unanimously recommended shareholders reject Paramount’s prior bid in favor of Netflix’s proposal. The board noted that Paramount’s financing lacked "full backstop protection." Although Netflix’s cash offer of $23.25 per share is lower than Paramount’s, the board deemed Netflix’s proposal superior—citing more reliable funding sources, an additional $4.50 per share in Netflix stock, and potential gains from Warner Bros.’ spin-off of its global Discovery business.
Yusuf Gheliani, CIO of Chicago-based IHT Wealth Management, which holds 16,000 Warner Bros. shares, 6,500 Netflix shares, and 60,000 Paramount shares, said the bidding war underscores the quality of Warner Bros.’ assets.
"Owning such premium media assets is a rare opportunity," he noted, adding that he would likely follow the board’s recommendation. "They understand the industry intricacies far better than we do."
Investor Thomas Polin, who holds 484,000 Warner Bros. shares and 639,000 Paramount shares, said he might accept Paramount’s revised offer if Netflix doesn’t counterbid, as Paramount’s deal faces fewer regulatory hurdles.
"Ellison’s personal guarantee adds significant stability and removes much of the financing uncertainty," he said.
Gheliani and Polin aren’t the only investors holding stakes in competing studios. Vanguard, State Street, and BlackRock—Warner Bros.’ top three shareholders with a combined 22% stake—are also among the top ten shareholders of Paramount and Netflix. None of the three firms commented by press time.
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