Warner Bros Discovery (WBD) investors are deeply split over Paramount Skydance’s sweetened $108.4 billion bid for the iconic movie and streaming studio. The move has intensified a high-stakes battle for control of Warner Bros, the company behind HBO Max, DC Comics, and Harry Potter franchises.

Paramount Skydance’s latest offer, $30 per share, is set to expire on January 21, giving shareholders time to weigh whether to back the smaller media company over WBD’s existing agreement with Netflix, which values Warner Bros at $27.75 per share, or $82.7 billion.

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Investor Reactions: Split Opinions

Some of Warner Bros’ largest investors support the Netflix deal, citing stronger financing and lower debt risk. Alex Fitch, partner at Harris Oakmark, which holds about 96 million shares (4% of WBD), said:

“The value still isn’t clearly superior to what has already been agreed with Netflix. A tie goes to the incumbent.”

Smaller investors, including Yussef Gheriani of IHT Wealth Management, echoed concerns that Paramount’s bid could trigger breakup fees and high borrowing costs, leaving the combined company with $87 billion in debt.

However, other investors argue Paramount’s offer is financially and strategically superior, especially from a regulatory approval perspective. Matthew Halbower of Pentwater Capital, owning over 50 million shares, wrote to Warner Bros Chairman Samuel DiPiazza:

“The board breached its fiduciary duty to shareholders by rejecting Paramount’s offer outright. Paramount’s deal is a better path forward and may face fewer regulatory hurdles.”

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Financial Details: Comparing Netflix and Paramount Deals

While Paramount’s cash offer appears higher, the Warner Bros board points out additional costs that reduce its net value:

• $2.8 billion breakup fee payable to Netflix
• $1.5 billion in banker fees
• $350 million in financing costs

Netflix’s bid, despite being lower in share price, is considered less risky and more straightforward to execute, according to Warner Bros executives.

Mario Gabelli of Gabelli Funds, which owns 5.7 million WBD shares, favors Paramount, citing its all-cash offer and “faster path to regulatory approval.” He told CNBC:

“At the moment, Paramount has a superior bid. Netflix has to simplify their bid.”

Harris Oakmark remains open to reconsidering if Paramount improves its offer.

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Strategic Implications and Market Reaction

Warner Bros’ rich content library—including franchises like Harry Potter, DC Comics, and recent hits like Heated Rivalry—has made the studio a marquee media asset, fueling this bidding war.

The top three WBD shareholders—Vanguard, State Street, and BlackRock—control roughly 22% of shares. Notably, all three also hold significant positions in Paramount and Netflix, highlighting complex overlapping interests in the deal.

On Wall Street, trading reflects investor indecision:

• Warner Bros shares: down 0.7%
• Paramount shares: up 0.7%
• Netflix shares: down 0.2%

Analysts say the outcome could reshape streaming and content ownership dynamics for years, depending on whether Paramount can convince enough shareholders to back its higher, all-cash offer.

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Key Takeaways

• Paramount Skydance offered $108.4B ($30 per share) for Warner Bros; Netflix currently holds a lower $82.7B offer.
• Investors are split, citing financial risk, debt exposure, and regulatory hurdles.
• Paramount’s cash offer is simpler and may clear regulatory approval faster, but entails higher debt and potential breakup fees.
• Warner Bros’ extensive content library and streaming services make it a highly coveted media asset.
• Top shareholders like Vanguard, BlackRock, and State Street have influence in both Paramount and Netflix, complicating the bidding dynamics.