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Tag: hostile takeover

  • Paramount files lawsuit in pursuit of Warner Bros. Discovery and threatens proxy fight

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    Paramount is taking its pursuit of Warner Bros. Discovery to court.On Monday, Paramount CEO David Ellison announced a lawsuit in Delaware Chancery Court, where shareholders typically bring corporate disputes, as it attempts a hostile takeover of the iconic entertainment company.Ellison criticized Warner Bros. Discovery, also known as WBD, for a “lack of transparency” around its decision to favor Netflix’s bid for Warner Bros. and HBO.A WBD spokesperson had no immediate response, but an escalation in the form of a lawsuit had been predicted by Wall Street analysts.Ellison has been trying for months to buy all of WBD, but his entreaties have been rebuffed.So he is trying to gain control of WBD by offering to buy up shares for $30 each, and he is also threatening a proxy fight, vowing to nominate a Paramount-friendly slate of board members to take over the WBD board.Those board members, he said, would “exercise WBD’s right under the Netflix agreement to engage on Paramount’s offer and enter into a transaction with Paramount.”The proxy fight is a backup plan of sorts, in case a sufficient number of WBD shareholders don’t agree to sell their shares to Paramount in the coming weeks.Warner’s annual shareholder meeting has yet to be scheduled. Last year, it took place in June.WBD has said that it is moving forward with its signed agreement to sell its Warner Bros. and HBO assets to Netflix for $27.75 per share, with $23.25 in cash and the rest in Netflix stock.Netflix said last week that it is in talks with U.S. and EU regulators to receive the necessary approvals for the deal.But Paramount’s hostile takeover bid means that a giant question mark looms over the entire media empire.Ellison said on Monday that WBD’s decision-making “just doesn’t add up — much like the math on how WBD continues to favor taking less than our $30 per share all-cash offer for its shareholders.”WBD has raised a variety of concerns about Paramount’s debt financing, onerous conditions connected to the bid and other matters.The WBD board has also cited the potential value of its cable assets, which Netflix is not acquiring. Those channels, including CNN, are being broken off into a new, publicly traded company called Discovery Global this summer.Paramount has argued that the channels have little equity value. The lawsuit in Delaware will pursue more information about the valuation “so that,” Ellison said, “WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer.”Major WBD shareholders have been split over Paramount, with some calling it a superior bid and others siding with the Netflix deal.Meanwhile, President Trump has said that he will be personally involved in reviewing any merger, raising questions about whether his personal predilections will come into play.Over the weekend, he posted a link on Truth Social to a month-old opinion piece from One America News Network titled “Stop The Netflix Cultural Takeover.” The column said “it is time to say no to a woke media monopoly.”Netflix has exuded confidence in its ability to get the deal across the finish line in the next 12 to 18 months.

    Paramount is taking its pursuit of Warner Bros. Discovery to court.

    On Monday, Paramount CEO David Ellison announced a lawsuit in Delaware Chancery Court, where shareholders typically bring corporate disputes, as it attempts a hostile takeover of the iconic entertainment company.

    Ellison criticized Warner Bros. Discovery, also known as WBD, for a “lack of transparency” around its decision to favor Netflix’s bid for Warner Bros. and HBO.

    A WBD spokesperson had no immediate response, but an escalation in the form of a lawsuit had been predicted by Wall Street analysts.

    Ellison has been trying for months to buy all of WBD, but his entreaties have been rebuffed.

    So he is trying to gain control of WBD by offering to buy up shares for $30 each, and he is also threatening a proxy fight, vowing to nominate a Paramount-friendly slate of board members to take over the WBD board.

    Those board members, he said, would “exercise WBD’s right under the Netflix agreement to engage on Paramount’s offer and enter into a transaction with Paramount.”

    The proxy fight is a backup plan of sorts, in case a sufficient number of WBD shareholders don’t agree to sell their shares to Paramount in the coming weeks.

    Warner’s annual shareholder meeting has yet to be scheduled. Last year, it took place in June.

    WBD has said that it is moving forward with its signed agreement to sell its Warner Bros. and HBO assets to Netflix for $27.75 per share, with $23.25 in cash and the rest in Netflix stock.

    Netflix said last week that it is in talks with U.S. and EU regulators to receive the necessary approvals for the deal.

    But Paramount’s hostile takeover bid means that a giant question mark looms over the entire media empire.

    Ellison said on Monday that WBD’s decision-making “just doesn’t add up — much like the math on how WBD continues to favor taking less than our $30 per share all-cash offer for its shareholders.”

    WBD has raised a variety of concerns about Paramount’s debt financing, onerous conditions connected to the bid and other matters.

    The WBD board has also cited the potential value of its cable assets, which Netflix is not acquiring. Those channels, including CNN, are being broken off into a new, publicly traded company called Discovery Global this summer.

    Paramount has argued that the channels have little equity value. The lawsuit in Delaware will pursue more information about the valuation “so that,” Ellison said, “WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer.”

    Major WBD shareholders have been split over Paramount, with some calling it a superior bid and others siding with the Netflix deal.

    Meanwhile, President Trump has said that he will be personally involved in reviewing any merger, raising questions about whether his personal predilections will come into play.

    Over the weekend, he posted a link on Truth Social to a month-old opinion piece from One America News Network titled “Stop The Netflix Cultural Takeover.” The column said “it is time to say no to a woke media monopoly.”

    Netflix has exuded confidence in its ability to get the deal across the finish line in the next 12 to 18 months.

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  • Why Republican Politicians Do Whatever Trump Says

    Why Republican Politicians Do Whatever Trump Says

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    The story Donald Trump tells about himself—and to himself—has always been one of domination. It runs through the canonical texts of his personal mythology. In The Art of the Deal, he filled page after page with examples of his hard-nosed negotiating tactics. On The Apprentice, he lorded over a boardroom full of supplicants competing for his approval. And at his campaign rallies, he routinely regales crowds with tales of strong-arming various world leaders in the Oval Office.

    This image of Trump has always been dubious. Those boardroom scenes were, after all, reality-TV contrivances; those stories in his book were, by his own ghostwriter’s account, exaggerated in many cases to make Trump appear savvier than he was. And there’s been ample reporting to suggest that many of the world leaders with whom Trump interacted as president saw him more as an easily manipulated mark than as a domineering statesman to be feared.

    The truth is that Trump, for all of his tough-guy posturing, spent most of his career failing to push people around and bend them to his will.

    That is, until he started dealing with Republican politicians.

    For nearly a decade now, Trump has demonstrated a remarkable ability to make congressional Republicans do what he wants. He threatens them. He bullies them. He extracts from them theatrical displays of devotion—and if they cross him, he makes them pay. If there is one arena of American power in which Trump has been able to actually be the merciless alpha he played on TV—and there may, indeed, be only one—it is Republican politics. His influence was on full display this week, when he derailed a bipartisan border-security bill reportedly because he wants to campaign on the immigration “crisis” this year.

    David Frum: The GOP’s true priority

    Sam Nunberg, a former adviser to Trump, has observed this dynamic with some amusement. “It’s funny,” he told me in a recent phone interview. “In the business world and in the entertainment world, I don’t think Donald was able to intimidate people as much.”

    He pointed to Trump’s salary negotiations with NBC during Trump’s Apprentice years. Jeff Zucker, who ran the network at the time, has said that Trump once came to him demanding a raise. At the time, Trump was making $40,000 an episode, but he wanted to make as much as the entire cast of Friends combined: $6 million an episode. Zucker countered with $60,000. When Trump balked, Zucker said he’d find someone else to host the show. The next day, according to Zucker, Trump’s lawyer called to accept the $60,000. (A spokesperson for the Trump campaign did not respond to a request for comment.)

    Contrast that with the power Trump wields on Capitol Hill—how he can kill a bill or tank a speakership bid with a single post on social media; how high-ranking congressmen are so desperate for his approval that they’ll task staffers to sort through packs of Starbursts and pick out just the pinks and reds so Trump can be presented with his favorite flavors.

    “I just remember that there’d be a lot of stuff that didn’t go his way,” Nunberg told me, referring to Trump’s business career. “But he has all these senators in the fetal position! They do whatever he wants.”

    Why exactly congressional Republicans have proved so much more pliable than anyone else Trump has contended with is a matter of interpretation. One explanation is that Trump has simply achieved much more success in politics than he ever did, relatively speaking, in New York City real estate or on network TV. For all of his tabloid omnipresence, Trump never had anything like the presidential bully pulpit.

    From the January/February 2024 issue: Loyalists, lapdogs, and cronies

    “It stands to reason that [when] the president and leader of your party is pushing for something … that’s what’s going to happen,” a former chief of staff to a Republican senator, who requested anonymity in order to candidly describe former colleagues’ thinking, told me. “Take away the office and put him back in a business setting, where facts and core principles matter, and it doesn’t surprise me that it wasn’t as easy.”

    But, of course, Trump is not the president anymore—and there is also something unique about the sway he continues to have over Republicans on Capitol Hill. In his previous life, Trump had viewers, readers, fans—but he never commanded a movement that could end the careers of the people on the other side of the negotiating table.

    And Trump—whose animal instinct for weakness is one of his defining traits—seemed to intuit something early on about the psychology of the Republicans he would one day reign over.

    Nunberg told me about a speech he drafted for Trump in 2015 that included this line about the Republican establishment: “They’re good at keeping their jobs, not their promises.” When Trump read it, he chuckled. “It’s so true,” he said, according to Nunberg. “That’s all they care about.” (Nunberg was eventually fired from Trump’s 2016 campaign.)

    This ethos of job preservation at all costs is not a strictly partisan phenomenon in Washington—nor is it new. As I reported in my recent biography of Mitt Romney, the Utah senator was surprised, when he arrived in Congress, by the enormous psychic currency his colleagues attached to their positions. One senator told Romney that his first consideration when voting on any bill should be “Will this help me win reelection?”

    From the November 2023 issue: What Mitt Romney saw in the Senate

    But the Republican Party of 2015 was uniquely vulnerable to a hostile takeover by someone like Trump. Riven by years of infighting and ideological incoherence, and plagued by a growing misalignment between its base and its political class, the GOP was effectively one big institutional power vacuum. The litmus tests kept changing. The formula for getting reelected was obsolete. Republicans with solidly conservative records, such as House Majority Leader Eric Cantor, were getting taken out in primaries by obscure Tea Party upstarts.

    To many elected Republicans, it probably felt like an answer to their prayers when a strongman finally parachuted in and started telling them what to do. Maybe his orders were reckless and contradictory. But as long as you did your best to look like you were obeying, you could expect to keep winning your primaries.

    As for Trump, it’s easy to see the ongoing appeal of this arrangement. The Apprentice was canceled long ago, and the Manhattan-real-estate war stories have worn thin. Republicans in Congress might be the only ostensibly powerful people in America who will allow him to boss them around, humiliate them, and assert unbridled dominance over them. They’ve made the myth true. How could he possibly walk away now?

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    McKay Coppins

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