On the occasion of Netflix’s proposed acquisition of the Warner Brothers’ video studio and streaming media assets, the Paramount Sky Dance Company, supported by the billionaire Allison family in the United States, proposed a $108 billion bid to block the deal at a higher price.
On Monday, the Paramount Sky Dance announced that a 30-dollar purchase offer would be submitted directly to the Warner shareholders and that an overall acquisition of all of the Warner business, including traditional television networks, would be planned. Paramount described this as a “better alternative” to the Netflix proposal, which would provide more cash advances to shareholders and a clearer prospect of regulatory approval. Formerly, United States President Trump had expressed “problems” about Netflix’s acquisition plan, noting that the size of the two companies raised competition concerns. The media giant Netflix, as well as the CBS News, the Nick Children’s Channel, and the famous Paramount series, are smaller. A few months ago, Paramount began to submit an offer of purchase, eventually prompting Warner, who owns the HBO and the classic IPs from Music to Harry Potter, to start a formal bidding process. Wall Street analysts have long believed that Paramount’s merger with Warner is strategically sound – it will give the merged entity a large-scale advantage to compete with rivals such as Netflix and Disney. Another key factor that Paramount is seen as a strong purchaser is that good relations between the Tromps and the Allison family, including the Silicon Valley billionaire, and the founder of the tech giant Oracle, Larry Allison, are seen as contributing to regulatory approval.
However, Warner announced last Friday that he had won Netflix and reached an agreement to value approximately $82.7 billion for his video studio and streaming media network. Warner indicated that the sale would be advanced upon completion of the dismantling of traditional television networks such as CNN. The new Paramount offer valued the company as a whole at $108.4 billion, claiming better terms. According to a document submitted to the United States Securities and Exchange Commission, the son-in-law of Trump, Jared Kouchner, was one of the financial partners in the deal with Paramount. On Monday, the executive of Netflix was confident in his own plan and reduced Paramount’s bid to a “total surprise”. Warner indicated that the new offer would be evaluated, but at present there was no change in the recommended position for the Netflix programme and promised to respond within 10 working days. The acquisition plans of any firm are expected to be subject to rigorous scrutiny by the US-European competition regulatory bodies. The analyst pointed out that Netflix ‘ s programme could raise concerns about a monopoly on tradable media, while the Piramon proposal would prompt regulators to examine the impact of the merger ‘ s market forces in the area of sports and children ‘ s channels on advertisers and local television distributors.
The plan of Paramount to place CBS and CNN under the same parent company is also of great interest, given the possible impact on the news industry and the close relationship between the Allison family and Trump. Trump indicated last weekend that he was expected to participate in the approval process, but his attitude remains unclear. In an interview with CNBC, Chief Executive Officer David Allison of Paramount stated that “good communication” with Trump on the deal had taken place, but expressed reluctance to speak on behalf of the President. Netflix, the world ‘ s largest television company, has over 300 million subscribers. Allison’s plan will continue his strategy of acquiring Paramount this year and integrating it into the sky dance industry. Ben Barringer, Director of Global Science and Technology Research in Quilter Cheviot, stated that “Paramon needs this deal more than Netflix”, and he thought that the Warner assets were simply “bringing on” Netflix. On Monday in CNBC, Allison stressed the benefits of his programme for the media industry as a whole, arguing that Netflix’s acquisition of Warner would give a single company too much control over actors such as actors, “it would be a bad deal for Hollywood”. At the same time, he questioned Warner ‘ s plan to break up traditional television networks into independent companies, which was doomed to failure and ultimately to harm shareholders.
Senior Netflix expressed confidence in the approval at the meeting on Monday, stressing that his programme did not include large-scale lay-offs. The reaction was divided by the fact that on Monday there was an increase of more than 4 per cent in the Waer stock price, a sharp 9 per cent rise in Paramount and a drop of more than 3 per cent in the Netflix stock price.