Imagine waking up to find out that the quiet merger you thought was basically done is suddenly under full-scale attack. That’s exactly what happened Monday morning in Hollywood and on Wall Street when Paramount threw a massive wrench into Netflix’s plans.
It wasn’t a polite phone call or a revised term sheet. It was a straight-up hostile tender offer launched directly at Warner Bros. Discovery shareholders: $30 a share, all cash, take it or leave it. And just like that, what looked like a relatively clean sale of WBD’s studio and streaming assets to Netflix turned into one of the messiest takeover battles the media industry has seen in years.
A Dramatic Monday Morning in Media
I’ve been covering media deals for a long time, and I can’t remember the last time a bidder went hostile this fast after a signed agreement. Usually there’s months of flirting, leaked talks, maybe a bear-hug letter. This time Paramount basically said, “Nice deal you’ve got there with Netflix… be a shame if someone offered your shareholders cold hard cash instead.”
The numbers tell the story pretty clearly.
| Offer | Price per share | Structure | Includes Cable Nets? |
| Netflix (signed) | $27.75 | Cash + Stock | No |
| Paramount (hostile) | $30.00 | All Cash | Yes (whole company) |
On paper, Paramount’s bid looks richer, especially when you remember that Netflix isn’t even buying the entire company. They were only after the film studio, HBO Max (now just Max), and a few other crown jewels, leaving the declining cable networks behind. Paramount wants everything, and they’re willing to pay a premium for it.
How a Hostile Tender Actually Works
A lot of people hear “hostile” and picture Gordon Gekko storming the boardroom. In reality it’s far more boring and far more dangerous for the target.
- Paramount offers $30 directly to every WBD shareholder
- The offer stays open for 20 business days (and can be extended)
- Any shareholder can tender their shares and get paid immediately if the deal closes
- If Paramount gets to 51%, they control the board and can force the merger
- Even a large minority stake gives them enormous leverage
That last point is crucial. The WBD board can scream “we recommend Netflix” all they want, but if 40-50% of shareholders tender to Paramount, the board is going to have some very uncomfortable conversations.
Why David Ellison Thinks He Can Win
David Ellison didn’t get to run Paramount by being shy. On Monday he went on television and basically called the Netflix deal a mistake in every possible way.
“Creating a streaming service at that scale would be terrible for consumers and terrible for Hollywood. It’s anticompetitive in every fundamental way you look at it.”
– David Ellison, Paramount CEO
He’s not entirely wrong. A combined Netflix + Max would instantly become the undisputed heavyweight champion of streaming, with a library that would make Disney+ blush. Regulators hate market concentration, especially when it involves content that can’t easily be replaced.
Paramount’s counter-argument is simple: our deal is bigger, it’s all cash (no stock risk), and we actually want those “old” cable networks everyone else is running from. Ellison claims those linear assets are worth only about $1 per share, but the market seems to agree they’re not completely worthless yet.
The $2.8 Billion Breakup Fee Problem
Here’s where it gets spicy. If WBD walks away from Netflix, they owe a $2.8 billion breakup fee. That’s real money, about $4 per share worth. So Paramount’s $30 offer is effectively $26 when you subtract the fee they’d probably have to cover.
But Ellison already signaled the $30 bid is not his best and final offer. If serious talks restart, that number can go higher, and Paramount could agree to pay part or all of the termination fee. Suddenly the math starts looking very different.
What Netflix Is Saying (and Not Saying)
Ted Sarandos spoke at a conference the same day and stayed remarkably calm.
“We’re super confident we’re going to get it across the line and finish.”
– Ted Sarandos, Netflix co-CEO
He also took a subtle jab at Paramount’s promised $6 billion in synergies: “We’re not cutting jobs. We’re making jobs.” Translation: your cost cuts mean layoffs, ours mean growth.
Notice what he didn’t say: “We’ll raise our bid if we have to.” Netflix almost never overpays. Their entire corporate culture is built around discipline. But this asset collection is arguably unique, HBO, DC Comics, the Turner library. There isn’t another one like it on the market.
Regulatory Roulette
In my experience, regulators don’t care about “cash vs. stock” or even price that much. They care about market share and bargaining power.
A Netflix-Metro (Warner studio) combo instantly controls roughly 35-40% of U.S. streaming viewing hours. That’s a number that makes antitrust lawyers salivate. Add in the fact that both companies license huge amounts of content to rivals, and you’ve got a textbook “vertical + horizontal” concern.
Paramount’s deal, by contrast, keeps two large streaming platforms (Paramount+ and Max) separate while combining them under one corporate roof. It’s still big, but arguably less immediately threatening than handing Netflix the keys to HBO.
What Happens Next – A Timeline
- Now until early January – Paramount tender offer open (20 business days)
- Mid-January – We’ll know how many shares tendered. Below 20% and Paramount probably walks. Above 40% and real pressure mounts.
- Late January / February – Possible counter-bid from Netflix, or reopened talks with Paramount
- Spring 2026 – Regulatory reviews begin in earnest for whichever deal survives
- Late 2026 / early 2027 – Likely closing window if approved
Or everything blows up in a shareholder lawsuits and we’re back to square one. Media deals have a way of doing that.
The Bigger Picture for Investors
For regular investors, this is actually a pretty fascinating arbitrage situation. WBD stock closed Monday around $28.50, meaning the market is pricing in a decent chance the Paramount bid succeeds or forces Netflix to pay more.
Personally, I think the smart money is betting on some form of higher bid, whether from Paramount or a sweetened Netflix offer. The assets are simply too valuable to walk away from at these levels, especially with private equity and sovereign funds circling anything that smells like distressed media.
Either way, the next few weeks are going to be wild. Shareholders hold the power now, not the boardrooms. And when shareholders smell cash, they tend to follow it.
Buckle up. The streaming wars just went nuclear.
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