David Ellison is not giving up his quest to build a new Hollywood giant.
Paramount, controlled by Ellison, revealed in a regulatory filing Thursday that it would extend the deadline for its takeover bid for shares of Warner Bros. Discovery. The firm had previously asked Warner shareholders to sell their shares to Paramount for $30 each by Wednesday.
The new deadline is February 20.
Paramount faces an uphill battle in its pursuit of its biggest rival in the entertainment industry. So far, investors have pledged 168.5 million shares of Warner to Paramount, according to Thursday's filing with the Securities and Exchange Commission. Warner, in a statement, said the response represented only about 7% of its investors.
Paramount also filed proxy documents, saying it would challenge an alternative offer from Netflix at an upcoming special meeting of Warner shareholders to vote on selling the company. Warner's board of directors has not yet set a meeting date, but has suggested that the crucial vote could occur in April, which would delay the pitched battle for the company until the spring.
Warner's board of directors unanimously agreed on Dec. 4 to sell much of the company to Netflix for $27.75 a share. Before that can happen, Warner must spin off CNN and other basic cable channels into a new publicly traded company called Discovery Global.
The multi-step process is giving Paramount a wide window to make its case to Warner shareholders.
Warner Bros. Discovery, in a statement, was dismissive of Paramount's efforts.
“Once again, Paramount continues to make the same offer that our board of directors has repeatedly and unanimously rejected in favor of a superior merger deal with Netflix,” Warner Bros. Discovery said in a statement. “It's also clear that our shareholders agree: more than 93% also reject Paramount's inferior plan. We are confident in our ability to achieve regulatory approval for the Netflix merger.”
Paramount has sued Warner Bros. and its CEO, David Zaslav, in a Delaware court, but the judge denied Paramount's request to expedite the legal proceedings to help Paramount make its case to Warner shareholders.
Paramount hopes that, over time, the proxy battle will be more fruitful. He plans to ask Warner shareholders to vote against the Netflix deal at the special meeting. Paramount has also said it will present its own slate of directors to be elected during Warner's annual meeting with shareholders.
“The consideration payable to WBD shareholders in the Netflix transaction is well below Paramount's $30 per share cash offer,” Paramount said in Thursday's announcement.
Billionaire Larry Ellison and his family took control of Paramount in August, determined to become major Hollywood players.
The following month, the Ellisons began a bold pursuit of Warner Bros. Discovery. Their goal is to combine two century-old film studios and vibrant television production capabilities and marry such popular television networks as HBO, CBS, Comedy Central, HGTV and TBS.
Netflix was the surprise suitor after Warner opened the auction to other bidders in late October.
Paramount launched its hostile takeover last month after failing to gain traction with Warner's board, which remains steadfast in its support of Netflix's proposal to buy HBO, HBO Max, television production and film studio Warner Bros., which led the Hollywood pack in the prestigious Oscar nominations, which were announced Thursday, for $72 billion.
Earlier this week, Netflix converted its $27.75 per share offer to an all-cash offer in hopes of defusing some of Paramount's criticism of its deal.
Paramount, which has the support of President Trump, has been emphasizing that Netflix's regulatory path is uncertain.
Both sides plan to present their arguments to US and European regulators.
Unlike Netflix, Paramount wants to buy all of Warner Bros. Discovery, including CNN and other basic cable channels. The value of the proposed cable channel company, Discovery Global, influences the final value shareholders would receive if Netflix's bid prevails.
The Warner cable channel spinoff is expected to be completed this summer. The value of the networks is in doubt, giving Paramount ammunition to claim that its $30-per-share takeover bid for the entire company was more lucrative than Netflix's bid for the Warner and HBO studios.
