- The combined company is expected to produce roughly 30 theatrical releases annually.
- Paramount is planning to merge Paramount+ with HBO Max into a single streaming platform.
- Netflix first offered $82.7 billion for WBD, excluding cable networks.
Paramount Skydance (PSKY) has reportedly confirmed on Monday that its acquisition of Warner Bros (WBD) will leave the newly formed company with an estimated $79 billion in net debt.
According to a Reuters report, CEO David Ellison emphasized that there are no current plans to sell or spin off any cable networks following the $100 billion, $31-per-share deal finalized on Friday.
Streaming Ambitions
Paramount secured the agreement after Netflix Inc. (NFLX) declined to increase its earlier bid, allowing the studio to take control of the full portfolio of Warner assets, which includes HBO, DC Comics, and Warner Bros. movies.
The combined company is expected to produce roughly 30 theatrical releases annually while continuing operations at both Warner Bros. and Paramount studios, the report cited.
Paramount Skydance stock traded over 2% lower on Monday, after the morning bell. On Stocktwits, retail sentiment around the stock remained in ‘extremely bullish’ amid ‘extremely high’ message volume levels.
A CNBC report said that Paramount is planning to merge Paramount+ with HBO Max into a single streaming platform, serving roughly 200 million subscribers. Ellison said the company intends to keep the HBO name in place even after merging Paramount+ and HBO Max into one streaming service.
Bidding Battle
The contest for Warner Bros assets was intense, with Netflix first offering $82.7 billion, excluding cable networks. Paramount responded with a hostile bid, covering Warner’s breakup fee with Netflix and raising the offer to $31 per share.
Paramount will now acquire 100% of WBD, valuing WBD at $81 billion in equity value and $110 billion in enterprise value. The deal is supported by $47 billion in equity financing provided by the Ellison family and RedBird Capital Partners. Along with that cash investment, lenders, including Bank of America, Citigroup, and Apollo, have committed $54 billion in debt financing.
PSKY stock has gained over 14% in the last 12 months.
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