Paramount Skydance Corp. (NASDAQ:PSKY) has launched a hostile $108 billion bid for Warner Bros Discovery Inc. (NASDAQ:WBD), backed by financing from Jared Kushner‘s Affinity Partners and Middle Eastern sovereign wealth funds.
The ‘Expensive’ Battle For Dominance
The aggressive move aims to derail a rival acquisition by Netflix Inc. (NASDAQ:NFLX), sparking a high-stakes media battle that experts warn creates a risky corporate “monolith,” fraught with deep ethical conflicts and integration nightmares.
The bidding war centers on control of WBD’s massive intellectual property library, including HBO and DC Entertainment. Netflix’s rival offer, valued at approximately $83 billion in enterprise value, aims to create a “global content giant.”
Nick Grous of Ark Invest predicts this consolidation would accelerate the death of theatrical windows, making streaming the “scalable default.”
However, the financials have alarmed analysts. John Colley, a Professor of Practice at Warwick Business School, criticized the Netflix bid as dangerously “expensive,” noting an enormous 121% premium above the share price and a record $5.8 billion break fee.
“Monoliths are not always easy to run,” Colley warned, citing the heavy debt load and lack of due diligence. “As most integrations fail, Netflix might find this more challenging than it realizes.”
See Also: Analyst Says Netflix-Warner Bros Merger Is About More Than Movies— It’s An AI Play
Minefield Of Ethics And Politics
Paramount’s counter-bid has injected President Donald Trump‘s family interests directly into the regulatory spotlight.
Paramount’s financing relies on Kushner’s firm, which is heavily funded by Saudi and Qatari sovereign wealth funds, as well as Abu Dhabi-owned L’imad Holding Co.
The arrangement has drawn sharp rebuke from ethics watchdogs. “If you were teaching a class at business school on conflicts of interest, this would be Exhibit A,” said Nell Minow of ValueEdge Advisors to Reuters.
While Trump told reporters he has not discussed the deal with his son-in-law, his assertion that he “would be involved” in regulatory decisions regarding the merger has raised concerns about whether the President’s influence could tip the scales.
Regulatory Headwinds
Both suitors face intense scrutiny. The Justice Department must now weigh the anti-competitive risks of Netflix’s vertical consolidation against the complex web of foreign financing and political favoritism arguably inherent in the Paramount bid.
As Scott Amey of the Project On Government Oversight told Reuters, the “blurred line” between the administration and the Trump family’s business interests is expanding, threatening the integrity of the deal clearance process.
How Have PSKY And NFLX Performed?
- PSKY rose 9.02% to $14.57 apiece on Monday. It surged another 1.24% during after-hours trading.
- Benzinga’s Edge Stock Rankings indicate that PSKY maintains a weaker price trend over the short, medium, and long terms, with a solid value ranking. Additional performance details are available here.
- NFLX dropped 3.44% on Monday to $96.79 apiece. It was up 8.59% YTD and 3.55% over the year.
- It maintains a weaker price trend over the short, medium, and long terms, with a solid quality ranking. Additional performance details are available here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
