Paramount Offers to Buy Warner Bros. for $30 a Share

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Transcript

00:00We're just getting headlines, Keith. I know you've got to run, but Paramount is offering a $30 all-cash offer

00:07and saying that the equities will be backstopped by the Ellison family.

00:12So Paramount offering to buy Warner Brothers for $30 a share in cash, as had been reported,

00:18where the Netflix deal is for $27.75, and that's cash in stock.

00:22But of course, Paramount wants to buy the entire company, and Netflix is looking to split them up.

00:28So, or Warner Brothers' discovery would split up before the Netflix deal.

00:32I think this is interesting because the Paramount offer isn't just the $30 a share, right?

00:36If Warner Brothers goes with Paramount, they'll also get a $5 billion breakup fee from Netflix.

00:42Is that right, Geetha?

00:44Yeah, $5.8 billion to be exact.

00:47But the thing is, on the immediate face of it, Matt, the $30 is actually lower than what Netflix is offering.

00:54So Netflix, yes, they did offer $27.75 for the studio and streaming,

01:01but there is still some inherent value in the Discovery Global TV units.

01:05We calculate that to be about $4 a share, so you have the total value of Warner Brothers Discovery there at $32.

01:11So again, that offer is still superior to this Paramount offer at $30.

01:15So again, that offer is still superior to this Paramount offer at $3.8 billion.