Paramount Skydance boss David Ellison has bid $24 a share for Warner Bros. Discovery – a mega-deal worth $57 billion that was nevertheless rejected as takeover negotiations between the media giants heat up, The Post has learned.
The latest back and forth – which has played out only in recent days – marks the third straight time Ellison has been rebuffed as WBD’s wily CEO David Zaslav shops the company to a number of large media and tech outfits, sources said.
News of the spurned $24-a-share bid hasn’t previously been reported. On The Money reported last week that such a bid was in the offing. Now, people inside WBD are expecting a fourth bid from Ellison imminently, On The Money has learned.
On Tuesday, WBD disclosed that it has received “unsolicited interest” from prospective acquirers and said it was open to a sale – news that sent the company’s stock soaring nearly 12%. The shares on Tuesday recently added $2.12 to trade at $20.44.
A rep for Zaslav had no comment; a Skydance spokeswoman also declined to comment.
WBD said it has “initiated a review of strategic alternatives” following “unsolicited interest the Company has received from multiple parties.” Those include bids for the whole company as well as offers for parts that include its top-ranked studio and popular streaming service, HBO Max, which WBD plans to spin off from its cable properties in April.
Prompting the Tuesday announcement, sources said, was the belief by Zaslav and his team that Ellison was imminently prepared to ramp up pressure on them to sell with a public announcement of his intentions, one that could bring his bid to between $26 and $28 a share.
Such a move, known as a hostile takeover, is where the suitor appeals to shareholders of a target company as opposed to privately working with a company’s board. Zaslav & Co sought to circumvent Ellison’s attempt to use a public bid as leverage on WBD to take what management believes is an inferior offer, these people add.
Zaslav believes his properties — which include the No. 1 ranked studio, the No. 3 ranked streaming services, a top cable channel in HBO, a still profitable news channel in CNN as well as billions of dollars worth in intellectual property — is worth as much as $30 a share or more, meaning he wants Ellison to pay above $70 billion for the entire company.
He has successfully argued to his board in rejecting three offers from Ellison that he can hold out for more money; some analysts have just his streaming and studio businesses – set for a May spin-off from his global cable properties – valued at $30 a share.
Zaslav has the support of his board to continue to reject offers until they come close to $30 a share, people with knowledge of the matter say. In the meantime, he will continue to pursue the breakup of his company, while he shops either all of it or various pieces, The Post has learned.
The Post was first to report WBD has received interest – particularly in its studio and streaming service – from Netflix, Amazon, Comcast and even media giant Apple. Microsoft, which also has a small streaming service, is also said to have looked at parts of the company.
The hard “no” from Zaslav is the latest rebuff for Ellison after the independent movie producer – who also is the son of tech tycoon Larry Ellison, the world’s second-richest person – snapped up Paramount in August.
As previously reported by the Post, Ellison has tapped private equity giant Apollo for financing of the deal. His media company, Paramount Skydance, is part of a partnership with private equity powerhouse Redbird Capital run by veteran media-dealer Gerry Cardinale.
It’s still unclear what role Larry Ellison will play in the unfolding drama in terms of funding a mega purchase like WBD, which would cost many multiples of the $6 billion David Ellison recently paid for Paramount, a mid-sized media company with flailing assets like MTV and CBS and a middling studio.
Some media business observers say the elder Ellison has been reluctant to sell his Oracle stock for the purchase of WBD, which accounts for David Ellison’s so-far tepid bidding for the company and has given Zaslav room to reject those bids.
