“Time to put up or shut up” for David Ellison if he wants to own the Warner Bros. Discovery media empire – and he’s got a couple of weeks to decide.
That’s the message coming from WBD’s mercurial CEO David Zaslav, according to sources close to the company, after WBD on Monday filed an amended proxy statement with the Securities and Exchange Commission, indicating to Wall Street it believes that it’s on track to hold an expedited shareholder vote to approve Netflix’s $72 billion acquisition of WBD’s Warner Bros. studio and HBO Max streaming service.
Specifically, WBD believes the vote will get approvals from the SEC in the coming days, clearing the way for a vote later this month or early next month. That means Ellison’s media company, Paramount Skydance, had better get in front of WBD shareholders with a sweetened bid – and fast, sources close to WBD say.
“Based on the way things are moving, they have about two weeks to make a counter bid, their eighth one at this point,” said a senior WBD executive who spoke on the condition of anonymity.
“If they fail to make a compelling counter bid, this will be Netflix’s company because shareholders won’t reject a guaranteed $27.75 a share,” the source added. “Remember, the proxy will be a vote to approve Netflix owning WBD – not a choice between Paramount or Netflix that is unless they make another offer.”
As The Post previously reported, Zas began forcing Ellison’s hand to sweeten his $78 billion, $30 a share “hostile” bid for the whole company two weeks ago, when he filed paperwork for an expedited “proxy” or shareholder vote to approve Netflix’s $72 billion deal for the studio and streamer, which WBD’s board prefers.
Then on Monday, WBD announced that the expedited vote is now fully in motion as it filed the amended proxy statement with the SEC. It’s all a bid to further pressure Paramount Skydance – both David and his father, the billionaire Oracle co-founder Larry Ellison, and their deal collaborators at RedBird Capital to come to the table with more money or go home, The Post has learned.
An SEC spokesman had no immediate comment about the time of its proxy approval, but the filing comes as the WBD-Netflix deal faces increased regulatory scrutiny, including a Senate hearing on Tuesday.
A spokeswoman for Paramount Skydance had no immediate comment; a WBD rep had no comment outside of confirming the release of the revised proxy. A Netflix rep declined to comment.
Zas is driving a hard bargain, looking for as much as an extra $4 a share from Paramount, according to people close to the negotiations. That’s on top of paying up front the $2.8 billion break-up fee WBD is on the hook for if it walks away from Netflix.
Zas is also demanding that Larry Ellison, currently worth $206 billion based on his holdings of Oracle stock, to personally back up tens of billions in debt he’s using in his bid, much like he’s doing with his personal guarantee of $40 billion in equity that is in his son’s offer.
But Ellison’s first personal guarantee came before his net worth took a sharp turn downward, a nearly $200 billion decline based on his Oracle holdings in recent months. People inside WBD speculate that’s the main reason why Paramount Skydance has been unwilling to nudge on its $78 billion offer.
Paramount Skydance denies that Ellison’s money woes are to blame, pointing out he’s still enormously rich, while contending their offer for the entire company is still far superior to Netflix’s deal, which relies on a separate and highly speculative sale of WBD’s cable assets (CNN, TNT, Discovery) to push it above $30 a share.
PSKY also notes that Netflix must convince skeptical regulators in the US and abroad that the combination of its own No. 1 streaming service, with WBD’s No. 3 most popular, HBO Max, doesn’t violate antitrust laws.
Netflix has been meeting with regulators in the US, the UK and the EU, arguing that it faces enormous competition for social media including YouTube and that the customer overlap between Netflix and HBO Max subscribers is significant – more than 80%.
The charm offensive has picked up in recent days in preparation for a Tuesday hearing on the deal by the Senate Judiciary Subcommittee chaired by Sen. Mike Lee of Utah. Lee, a Republican, has said the deal presents “a lot of antitrust red flags.” Netflix CEO Ted Sarandos will testify at tomorrow’s hearings as well as a rep for WBD.
