Paramount Makes Hostile Bid for Warner Bros. Discovery

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Michelle Hussein 0:00
Hello and welcome. This is The Michelle Hussein Show. I'm Michelle Hussein. I speak with people like Elon Musk. I think I've done enough. And Shonda Rhimes. That's so cute. This will be a place where every weekend you can count on one essential conversation to help make sense of the world. So please join me, listen and subscribe to The Michelle Hussein Show from Bloomberg Weekend, wherever you get your podcasts.
Unknown 0:27
You certainly ask interesting questions.
Michelle Hussein 0:32
Bloomberg Audio Studios. Podcasts. Radio. News. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
Ed Ludlow 0:53
This is Bloomberg Tech coming up. Paramount making a hostile bid for Warner Brothers Discovery just days after the company agreed to a deal with Netflix.
Michelle Hussein 1:01
Plus, President Trump wants to limit state-level AI regulation. He plans to approve an executive order this week aiming for one rule on artificial intelligence.
Ed Ludlow 1:11
And IBM is buying the data streaming platform Confluent for about $9.3 billion, one of its largest takeovers yet. Look at that share market reaction for Confluent. Let's check in on the broader markets, though. Anticipation, anticipation of the macro perspective that is the Federal Reserve policymaking later this week. We're down by about a quarter of a percent, but so much is happening underneath the hood at the moment, Ed, and you're going to dig into our story of the day, the week, maybe the year. Yep, Warner Brothers Discovery. This is the state of play. This morning, Paramount Skydance comes in with a hostile bid at $30 per share for the entirety of Warner Brothers Discovery. At the end of last week, Netflix had come in with an offer of $27.75 a share, but that was largely for the streaming and studio businesses
Ed Ludlow 1:58
with the plan that Warner Brothers Discovery, who entered into those talks with Netflix, would divest and spin off some of the remaining legacy cable units. There is so much to discuss in this. The financing in both senses. Where is it coming from? And what does the president of the United States have to say about it, Cara? There are so many angles to get into. Let's go to our key reporter on all of this, Bloomberg's entertainment reporter, Lucas Shaw. You head the entertainment coverage for this network. And I'm interested, what's the standout for you? Because we are unfolding who's behind the money, what's behind the attitude to go hostile. Take us there first. I guess the part that stands out to me is that David Ellison is coming back and going hostile with the same bid that was just rejected by the board rather than sweetening the offer.
Ed Ludlow 2:44
Paramount Skydance has now made six different attempts at buying Warner Brothers Discovery. They've been rejected every single time. But they are adamant and have been for days now that their offer is better than Netflix's, that the board is not factoring in certain things. They're confused by the valuation on the cable networks, for example, which would be spun off in the Netflix scenario. And so they're not going down without a fight. But I still think that they will end up probably having to raise the offer. Lucas, over the weekend, you reported in detail a meeting that took place between Netflix co-CEO Ted Sarandos and the president of the United States. Then the president Sunday night said, and this is before the Paramount Skydance bid came in, that from an antitrust or market share perspective, this has got to be looked at.
Ed Ludlow 3:35
Would the same not apply to Paramount Skydance? It would. It just is a different type of market, I guess. Right. So the president's comments, I thought, were notable because he had not spoken out against the Netflix bid at all, despite the fact that the paramount people were convinced that Trump was going to try to block it and was against it. And I would say his comments were sort of balanced. On the one hand, he praised Netflix and praised Ted Sarandos.

What is the significance of Paramount's hostile bid for Warner Bros. Discovery?

Ed Ludlow 4:00
But he did say, that would need to be reviewed. Netflix is the biggest player in Hollywood in streaming, and so if we were to add on HBO and Warner Brothers, it would make it even stronger there.

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