Paramount has launched a hostile takeover bid for Warner Bros. Discovery, directly challenging a previously announced acquisition agreement between Netflix and Warner Bros. Discovery.
What “hostile takeover” means
A hostile takeover is an attempt to acquire a company without the support of that company’s board and management, usually by going straight to shareholders with a premium offer for their shares. In this situation, “hostile” does not mean illegal; it simply means the target’s leadership prefers a different deal or wants to remain independent.
What Paramount is proposing
Paramount is making an all‑cash offer to Warner Bros. Discovery shareholders, reportedly around 30 dollars per share, to buy the entire company. This offer is framed as richer and simpler than Netflix’s mix of cash and equity, and is intended to persuade shareholders to vote down the Netflix agreement.
How this affects Netflix’s deal
Warner Bros. Discovery has already selected Netflix as its preferred buyer, but that deal still needs shareholder approval and regulatory review. If enough shareholders instead accept Paramount’s hostile bid and Paramount gains control, the new owners could move to terminate or renegotiate the Netflix agreement.
Why Paramount is going hostile
Paramount had been expected by many in the industry to be the winning bidder, so the choice of Netflix surprised Hollywood and Paramount’s leadership. Going hostile allows Paramount to bypass a board that chose Netflix and appeal directly to investors who might prefer a higher, all‑cash price or a faster, more straightforward closing.
Possible outcomes and defenses
Warner Bros. Discovery can respond with defenses commonly used against hostile bids, such as tactics that dilute a bidder’s stake (“poison pill”) or contractual protections favoring the Netflix deal. The final outcome will depend on how shareholders weigh Paramount’s price and structure against Netflix’s offer, as well as how long and complex regulators’ reviews are expected to be.
