Warner Bros shareholders foresee a “bidding war” for the company

Warner Bros shareholders anticipate that higher offers could come for the company in the context of the bid between Paramount Skydance and Netflix to take control of the studio, the Wall Street Journal (WSJ) reports this Wednesday. The newspaper claims that Paramount CEO David Ellison met this Tuesday in New York with several Warner shareholders. to seek your “backup” and encourage them to express to the board that Paramount’s offer is better than Netflix’s.

Last Monday, Paramount launched a hostile takeover valued at about $108 billion to acquire Warner, defying an agreement previously reached by Netflix to take over the company for $82.7 billion, including debt. Paramount’s offer amounts to $30 per share in cashexceeding the $27.75 offered by Netflix, which, for its part, has stated that it is “super confident” in closing the previously agreed deal.

However, some attendees at yesterday’s meeting considered it likely that Paramount would even raise its proposal, according to WSJ, which would have driven Warner shares They will advance 5% during the day this Wednesday on Wall Street. The shares were trading around $30, the same level as the takeover bid presented by Paramount.

“There is a strong possibility that a bidding war will break out”said Massimo Stabilini, a fund manager at Burren Capital Advisors and a Warner shareholder, according to the WSJ, which also notes that investors trust “a quick closing” of the operation. Other investors, such as Mario Gabelli, indicated that they would be inclined to sell shares to Paramount, which could force Netflix to improve its offer, the outlet adds. Warner estimates that the real value of its shares is between $31 and $32, according to WSJ, which also suggests that Paramount’s offer may not be the last.

However, the operation must pass the approval of regulators. Paramount hopes to have fewer obstacles than Netflix due to the latter’s dominant position in the streaming sector. streamingalthough political figures such as Democratic Senator Elizabeth Warren have also described Paramount’s offer as “a five-alarm antitrust fire”. The fight between the two giants has opened the door to greater business concentration in a sector already dominated in the US by a handful of large groups that bring together film, media, television and streaming.