A major WBD Shareholder is signaling that the latest Paramount attempt to win over investors still hasn’t cleared the bar, even after sweetening its proposal with new financial guarantees and revised terms.
Paramount has formally submitted an amended bid in its pursuit of Warner Bros. Discovery, but one of the company’s largest institutional investors is making it clear that the offer remains unconvincing—especially when stacked against a competing proposal from Netflix.
Harris Associates: “Necessary, but Not Sufficient”
The criticism comes from Harris Associates, which currently ranks as Warner Bros. Discovery’s fifth-largest shareholder. As of the end of September, the firm held roughly 96 million shares, representing about 4% ownership in WBD.
A graphic showing the Netflix and Warner Bros. Logos – Netflix
READ: Paramount Serves Up Amended Offer to Purchase WBD — Board Warns Shareholders To Take No Action Yet
Speaking to Reuters, Harris Oakmark portfolio manager and Director of U.S. Research Alex Fitch did not mince words when assessing Paramount’s revised proposal.
“The changes in Paramount’s new offer were necessary, but not sufficient,” he said.
Fitch emphasized that while Paramount’s revisions addressed some earlier concerns, they failed to provide the kind of decisive financial upside that would justify pivoting away from the competing Netflix deal.
“We see the two deals as a toss-up, and there is a cost to changing paths. If Paramount is serious about winning, they’re going to need to provide a greater incentive.”
What Paramount Changed in the Amended Offer
Paramount’s latest bid—backed by Skydance CEO David Ellison—includes several notable changes designed to appeal to skeptical shareholders:
- A personal financial guarantee from David’s father, Larry Ellison, the billionaire co-founder of Oracle
- A commitment not to revoke David Ellison’s trust
- More flexible financing terms
- A $5.8 billion breakup fee, matching the penalty attached to Netflix’s competing offer
WBD CEO David Zaslav Speaks at a New York Times event – YouTube, New York Times Events
Despite those additions, Harris Associates remains unconvinced that Paramount has meaningfully outbid its rival.
Netflix Deal Still Viewed as Superior on Terms
Netflix’s proposal differs in structure, targeting Warner Bros. Discovery’s studio and streaming assets rather than the entire company. The deal is valued at approximately $82.7 billion, and while Fitch has previously described the two bids as comparable in value, he has also been clear about where the advantage lies.
Netflix Co-CEO Ted Sarandos – YouTube, WSJ News
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Earlier this month, Fitch noted that Netflix’s offer is “superior on deal terms,” even if the overall valuation is in the same ballpark as Paramount’s.
That distinction appears to be weighing heavily on WBD’s leadership as well.
WBD Executives Still Lean Toward Netflix
Industry analysts say that Paramount’s revised bid, while improved, has not altered internal sentiment at Warner Bros. Discovery.
Source Photo Credits: Netflix, Warner Bros.
Ross Benes of eMarketer told TheWrap that executive preference remains firmly aligned with Netflix.
“The updated offer from Paramount doesn’t change the fact that WBD’s executives prefer Netflix,” he said
Benes added that while the amended bid strengthens Paramount’s case with shareholders and the board, WBD leadership is expected to continue backing the Netflix transaction for as long as it remains viable.
Pressure Builds on Paramount to Raise the Stakes
For now, the message from this influential WBD Shareholder is unmistakable: the amended Paramount offer may be closer than before, but it still isn’t compelling enough to force a change in direction.
Paramount Skydance CEO David Ellison being interviewed – YouTube, CNBC Television
Harris Associates has made clear it would be open to a revised proposal—if Paramount materially improves the financial consideration and fully resolves lingering concerns around deal structure. Until then, Netflix appears to remain the preferred path forward, both inside the executive suite and among at lease some key institutional investors.
Do you think WBD shareholders will side with Paramount or Netflix when all is said and done? Sound off in the comments and let us know!
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Harris Associates, based in Chicago, total employees 217. Nothing I can find, besides a private lawsuit against them in ’09 and the fact they’re based in Chi-town, screams “biased” to me. But there are plenty of whispers.
Whispers like them claiming Paramount’s offer is “inferior” in valuation and “suggesting” they add more money to the pot. Netflix’s stock has dropped almost 33% in value since July, and it’s looking to continue that downward trend. Netflix’s offer is losing value the longer things go on, meaning any further amendments by Paramount may be *lower* to account for such. This is exactly why investing is no different from gambling: if you don’t know when to walk away, you wind up losing.