Paramount's Hostile Bid Challenges WBD Valuation Amid Tech and Conglomerate Shifts

Key Quotes

"Paramount Sky Dance is launched a hostile $30 per share all cash tender offer for Warner Brothers Discovery, the same price Paramount offered last week. The move follows WBD's agreement on Friday to sell its Warner Brothers assets to Netflix for $72 billion, or an enterprise value of $82.7 billion. Paramount, however, is bidding for the entire company, offering an equity value of $74.4 billion and an enterprise value of $108.4 billion."

Kim Kahn explains that Paramount is making a direct, unsolicited offer to Warner Brothers Discovery (WBD) shareholders. This hostile bid aims to acquire the entire company, contrasting with WBD's prior agreement to sell specific assets to Netflix. Kahn highlights the significant difference in the total value proposed by Paramount compared to the Netflix deal.

"Paramount will also argue it's a better chance of securing regulatory approval than Netflix, citing antitrust concerns and the potential for the Trump administration to block the Netflix deal."

Kahn notes Paramount's strategy to position its offer as more favorable from a regulatory standpoint. The company intends to argue that its acquisition of WBD would face fewer antitrust hurdles than a Netflix deal. This argument leverages potential concerns about the Trump administration's stance on such large media mergers.

"In a statement, Paramount said its proposal provides shareholders $18 billion more in cash than the Netflix consideration, and that WBD's board is favoring the Netflix deal based on an illusory perspective valuation of the global network unit, which is unsupported by fundamentals and burdened by high leverage."

Kahn reports Paramount's claim that its offer is financially superior for WBD shareholders. Paramount asserts its proposal delivers $18 billion more in cash than the Netflix transaction. Furthermore, Kahn relays Paramount's criticism that WBD's board is undervaluing its global network unit in favor of the Netflix deal.

"Alphabet is lower after a federal judge ruled that the company must limit its partnerships with smartphone and smart device makers, including Apple and Samsung, to one-year agreements when setting Google Search or its AI app as the default option."

Kim Kahn states that Alphabet's stock declined following a judicial ruling impacting its business practices. The judge mandated that Alphabet's agreements with device manufacturers for setting Google Search or its AI app as the default must be limited to one-year terms. Kahn explains this ruling restricts Google's ability to secure long-term default placements on mobile devices.

"Analyst Dan Ives said 2026 is going to be finally the year that Apple actually enters the AI revolution, and noted that iPhone 17 demand is trending well into year-end, including in China, with a healthy holiday setup ahead."

Kahn relays Wedbush analyst Dan Ives' optimistic outlook on Apple. Ives predicts that 2026 will mark Apple's significant entry into the artificial intelligence market. He also indicates that demand for the iPhone 17 is performing strongly towards the end of the year, including in China, suggesting a positive holiday season.

"Longtime CFO Mark Hamburg will retire after 40 years with the firm, leaving in June 2027. He'll be replaced by Charles Chang, who will become senior vice president and CFO on June 1st, 2026."

Kim Kahn reports on a leadership transition at Berkshire Hathaway. Kahn states that long-serving Chief Financial Officer Mark Hamburg is set to retire in June 2027, after four decades with the company. Charles Chang is identified as his successor, taking on the CFO role in June 2026.