Geetha Ranganathan

Yeah, this really ramps up the pressure on Paramount because really the ball is now in their court.

They've been arguing for the longest time that the Netflix offer obviously is not that great because it had that stock confident.

Now obviously Netflix making it an all cash deal.

And now really what this hinges on is the value of the cable networks business.

So remember Netflix is only buying the studio and streaming assets.

There is still that cable networks business from Warner

which they expect to spin out.

And if you read a filing that was put out by Warner today, they have those cable networks valued anywhere from about $1.50, depending on how you value it, per share, going up to as high ed as about $7 a share.

So, again, I think they believe that they can actually extract more value if they go ahead and they complete that spin-out.

So, now, really, this is really kind of up the ante for Paramount.

They have to raise their bid significantly, I would think, in order to sway Warner's board.

Heather, you think $32 is the magic number.

Why?

I actually think, so 32 we think is a starting point to get Warner back to the board.

Just kind of looking at the value of the networks, looking at possible termination fees, financing costs.

But really, again, we think that Warner really looks at its cable networks business.

Yes, there is no doubt that this is a declining business.

It faces a lot of secular pressure from cord cutting.

But at the same time, I mean, they do have some great assets.

They have international exposure.