After Trump questioned Netflix, Paramount acquired Warner Bros.! CEO promises to give shareholders $17.6 billion in cash

After U.S. President Donald Trump's antitrust concerns regarding Netflix's acquisition of Warner Bros. Discovery, David Ellison, CEO of Paramount Skydance and son of Oracle CEO Larry Ellison, bypassed the Warner board and directly initiated a hostile takeover bid to shareholders.

Paramount proposed an all-cash offer of $30 per share, claiming it provides shareholders with $17.6 billion more cash than Netflix's deal, and that this transaction has a higher likelihood of regulatory approval. Paramount stated in a release that Warner Bros. Discovery submitted six proposals within 12 weeks, but the company "never engaged in meaningful contact." Paramount also sent a letter to Warner Bros., questioning its sale process and accusing the company of abandoning a fair bidding process, pre-selecting Netflix as the winner.

As the bidding war escalated, on Monday, December 8, both Warner Bros. and Paramount saw their stock prices surge, with Warner Bros. rising nearly 8% at the day's high and Paramount's early gains exceeding 7%. Meanwhile, Netflix further declined, dropping nearly 5% at its day's low.

From the current situation, this battle among Hollywood giants is far from over. According to eMarketer senior analyst Ross Benes, while Netflix is in a dominant position, it will still face twists and turns before reaching the finish line.

Paramount's hostile takeover occurred just after Warner Bros. Discovery reached an agreement with Netflix last Friday. On that day, Netflix announced it would acquire Warner's film production and streaming assets for a total price of $72 billion, offering $27.75 per share, which includes $23.25 in cash and $4.50 in stock. Paramount seeks to acquire all of Warner's assets, including cable networks like CNN and TNT, with a total offer of $108.4 billion.

Trump stated last Sunday that the Netflix deal involves "a significant market share, which could be a problem," and indicated he would personally participate in the decision-making process. According to market predictions from Polymarket, after Trump's statement, the probability of Netflix completing the acquisition by the end of 2026 dropped from about 60% to 23%, and further declined to 16% after Paramount initiated its hostile takeover.

Trump's chief economic advisor and director of the White House National Economic Council, Kevin Hassett, further pointed out on Monday that Trump wants a thorough analysis of Netflix's acquisition, and the U.S. Department of Justice will review the concentration of the streaming business and the extent of reduced competition resulting from the merger.

Paramount Pushes All-Cash Offer

On Monday, Paramount presented an all-cash acquisition proposal of $30 per share to Warner Bros. shareholders, with a total enterprise value of $108.4 billion. This offer is supported by equity financing from the Ellison family and private equity firm RedBird Capital, along with $54 billion in debt commitments from Bank of America, Citigroup, and Apollo Global Management Ellison stated in a media interview on Monday:

"Cash is still king on Wall Street, and compared to the deal Netflix currently has with shareholders, we are offering an additional $17.6 billion in cash. We believe that when they see what we are offering, that will be the proposal they vote to support."

Paramount's offer represents a 139% premium over Warner Bros.' unaffected stock price, higher than Netflix's cash and stock mix offer of $27.75 per share. The key difference is that Paramount seeks to acquire all of Warner's assets, while Netflix is only interested in the film studio and streaming business.

Netflix believes that the eventual breakup value of Warner's cable assets will reach several dollars per share, making its overall offer more attractive. However, Ellison stated on Monday that he values these cable assets at only $1 per share, while Warner executives privately value them at nearly $3 per share.

Ellison revealed that after Paramount submitted its offer on December 1, Warner responded that certain adjustments were needed. After Paramount made changes and raised its offer to $30 per share, he did not receive a reply from Warner CEO David Zaslav. Ellison said he texted Zaslav that $30 was not the company's best and final offer, implying that Paramount was willing to bid higher.

Reports have previously indicated that Warner Bros. management referred to the Netflix deal as "a sure thing," while holding a negative view of Paramount's offer. Ellison stated, "We are actually here to finish what we started; it was us who put the company into a bidding situation."

Regulatory Approval Becomes the Focus

Ellison positioned regulatory approval as a core advantage of Paramount's offer. He stated in the interview on Monday, "I am very grateful for my relationship with the president. I also believe he believes in competition. When you fundamentally look at the market, allowing the number one streaming service to merge with the number three streaming service is anti-competitive."

He emphasized that Paramount is smaller in scale and has a friendly relationship with the Trump administration, suggesting that the regulatory approval process for the deal would be shorter. Behind Paramount is Larry Ellison, co-founder of Oracle and the world's second-richest person, who has close ties to the Trump administration. Trump publicly praised the acquisition deal that Paramount completed last August.

Netflix is preparing to counter Paramount's market claims. According to Nielsen's industry measurement data, Netflix accounts for 8% of total TV usage time, slightly lower than Paramount's 8.2%. By this standard, Netflix ranks sixth on the Nielsen chart, with YouTube in first place and Disney in second.

Netflix is expected to argue that market analysis should include other services like YouTube and TikTok, which would significantly narrow its market dominance. Even if antitrust reviews focus solely on streaming, Netflix believes it will ultimately prevail, pointing to other major competitors like Amazon Prime and Disney.

Netflix co-CEO Ted Sarandos stated last Friday during an investor conference call that he is "highly confident" in the regulatory process, believing the deal is beneficial for consumers, employees, and innovation. This is not just empty talk; Netflix has also agreed to pay Warner Bros. a breakup fee of $5.8 billion if the deal fails or does not receive regulatory approval, one of the largest breakup fees in history If Warner Bros. decides to terminate the deal to seek other mergers, it will need to pay Netflix $2.8 billion.

Trump's Statement Triggers Market Shock

On Sunday, while heading to the Kennedy Center for an event, Trump raised potential antitrust concerns regarding the Netflix acquisition deal. "This needs to go through a process, and we'll see what happens," Trump stated. "But it involves a large market share, which could be a problem."

Trump confirmed that he recently met with Netflix Co-CEO Ted Sarandos. According to earlier media reports, Sarandos recently met with Trump at the White House to lobby for the acquisition. Sarandos argued at the time that Netflix is not an all-powerful monopoly and had faced user losses a few years ago.

Trump stated that Netflix "has a very large market share, and when they have Warner Bros., that share will increase significantly," adding that he will personally be involved in the decision-making process.

On Monday, Hassett stated that Trump's opinions on significant, society-changing merger cases are "not uncommon." However, ultimately, the Department of Justice will review the concentration of the streaming business and the extent of competition reduction caused by the merger. He said, "I think the president just really wants to ensure a thorough analysis to make sure we make the right choice."

Netflix's deal would merge the world's largest streaming platform with another top platform, HBO Max. The antitrust division of the Department of Justice may consider that the deal would give Netflix too much control over the streaming market, with the combined market share reaching 30%.

Netflix Deal Faces Multiple Challenges

In addition to the antitrust issues raised by Trump, the Netflix acquisition has also faced criticism from lawmakers in both parties in the U.S. Republican Congressman Darrell Issa and Democratic Senator Elizabeth Warren have questioned the deal, arguing that creating a global streaming giant with nearly 450 million users would harm consumer interests.

EU regulators may also conduct a thorough review of Netflix's proposal. In the UK, the deal even raised concerns before its announcement, with House of Lords member Luciana Berger pressuring the government to clarify how the deal would affect competition and consumer prices.

However, some analysts believe Netflix can prevail. Reports indicate that Netflix is expected to argue that over 75% of HBO Max subscribers are already subscribed to Netflix, making them complementary rather than competing products. Netflix is expected to argue that owning Warner Bros. will lower content costs, eliminate redundant backend technology, and bundle Netflix with Max, leading to lower prices.

Morgan Stanley analysts stated that Netflix's motivation stems from ensuring exclusive long-term control over high-quality intellectual property and reducing reliance on external production companies, as the company expands into gaming, live entertainment, and a broader consumer ecosystem. Acquiring Warner Bros. Exploration's vast intellectual property library will provide instant credibility, audience reach, and monetization potential for its gaming business.

Ed Yardeni, a senior Wall Street figure at Yardeni Research, stated, "I don't think this will really create a monopoly situation. Technological monopolies don't last long because someone will always find a way to compete with them, and there are certainly many other streaming services out there." "

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