Ancora Says WBD Has 'Clear Path' To Securing An Even Better Offer From Paramount, Calls Netflix Bid 'Highly Questionable'

• The firm pointed to antitrust concerns over the Netflix deal, while the Paramount deal has a “viable path” to regulatory approval.
• If the WBD board refuses to re-engage with Paramount to maximize shareholder value, Ancora said it would vote against the Netflix deal.
• The firm cited the Ellison Trust's backing as another factor in favor of the Paramount offer.

Activist investor Ancora on Wednesday backed Paramount Skydance Corp.’s (PSKY) offer for Warner Bros. Discovery Inc. (WBD), stating that the latter has a “clear path” to securing an even better offer from PSKY.

In its presentation, Ancora stated that the Paramount offer for WBD “includes certainty and can be increased,” while it termed the Netflix Inc. (NFLX) deal as “flawed, inferior, and high risk.”

“In contrast to Netflix’s highly questionable offer and the Discovery Global spinoff, Paramount Skydance Corporation (“Paramount”) is proposing to give shareholders real financial certainty with $30 per share in cash,” Ancora said in its presentation.

Paramount Skydance shares were up nearly 0.7% in Wednesday’s pre-market trade, while Warner Bros. Discovery shares gained nearly 1%. Retail sentiment on Stocktwits around both companies trended in the ‘bullish’ territory.

Netflix shares were up 0.6% at the time of writing, with retail sentiment trending in the ‘bearish’ territory on Stocktwits.

Ancora Calls Out WBD For Choosing Netflix

The activist investor said that the WBD board is calling on shareholders to vote for an “uncertain final cash consideration based on an unknown debt allocation and an unknown equity value of the Discovery Global spinoff.”

The firm also pointed to antitrust concerns over the Netflix deal, while the Paramount deal has a “viable path to regulatory approval.” Ancora also added that the Paramount offer has the “credible backing of the Ellison Trust.”

Paramount stated in its Tuesday announcement that the Ellison family and RedBird Capital Partners will contribute $43.6 billion in cash.

If the WBD board refuses to re-engage with Paramount to maximize shareholder value, Ancora said it would vote against the Netflix deal.

“Paramount has indicated its willingness to improve its proposal – stating that its offer was not “best and final” – demonstrating that there is a value-maximizing path forward,” Ancora added.

Ancora’s Position In WBD

Ancora also formally announced that it has built a stake worth $200 million in WBD. According to a report by The Wall Street Journal citing people familiar with the matter, Ancora intends to continue buying shares of the company.

The report added that if Ancora goes ahead with nominating director candidates, the focus would be on replacing those who have ties to WBD CEO David Zaslav.

Paramount’s Sweetened Offer

This comes after Paramount sweetened its $ 30-per-share all-cash offer for WBD. The company added a “ticking fee”, presenting an incremental cash consideration to WBD shareholders of $0.25 per share.

Paramount stated that this is equivalent to approximately $650 million cash value each quarter, for every quarter the transaction is not closed beyond Dec. 31, 2026.

The company also said that it will fund the $2.8 billion termination fee that WBD will owe Netflix if it decides not to proceed with the deal and instead accepts Paramount’s offer.

Paramount And Netflix's Offers Compared

Paramount’s offer of $30 in cash for each outstanding share of WBD’s Series A common stock reflects a total equity value of $78 billion and an enterprise value of $108 billion. This includes the net debt and noncontrolling interest components as well.

In contrast, Netflix’s offer valued WBD at an equity value of $72 billion and an enterprise value of $82.7 billion, but excluded the spinoff company.

PSKY stock is down 19% year-to-date, WBD stock is down 4%, while NFLX stock has declined 12%.

Also See: QXO Stock Is Soaring Pre-Market Today — What Is Fueling The Surge?

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on