Jared Kushner's private equity firm, Affinity Partners, has withdrawn its financial support from Paramount's aggressive attempt to acquire Warner Bros. Discovery, as confirmed by the firm on Tuesday.
This development comes in the wake of Warner's agreement to be acquired by Netflix earlier in December. Paramount, undeterred, has put forth a competing offer, aiming to bypass Warner's management and directly engage with its shareholders by proposing a higher bid of $30 per share, compared to Netflix's $27.75.
As reported by Breitbart, Warner Bros. Discovery, a titan among Hollywood's "big five" studios, boasts ownership of Warner Bros. Pictures, HBO, the DC Comics universe, and the Harry Potter franchise. The acquisition of such a powerhouse could significantly bolster the acquiring company, potentially reshaping the landscape of the streaming industry.
This could either propel Netflix further ahead of its competitors or establish Paramount as a formidable new contender.
Paramount, a smaller entity compared to Netflix, justified its decision to sidestep Warner's management by stating that previous offers had not been meaningfully engaged with. The company has made its latest offer public, allowing Warner shareholders the option to tender their shares directly at a fixed price, thereby supporting Paramount's bid. Unlike Netflix, Paramount's offer includes the acquisition of Warner's entire portfolio, encompassing cable networks such as CNN.
In its appeal to Warner's shareholders, Paramount suggested that its proposal might face fewer regulatory hurdles under the Trump administration. President Donald Trump has expressed concerns over the Warner-Netflix deal, citing potential issues with the combined market share's size. Kushner's withdrawal of financial backing from Paramount's bid removes a potential advantage in gaining favor with President Trump. The specific contribution from Kushner's Affinity Partners was not detailed in Paramount's recent SEC filings.
Affinity Partners released a statement explaining their decision: "With two strong competitors vying to secure the future of this unique American asset, Affinity has decided no longer to pursue the opportunity. The dynamics of the investment have changed significantly since we initially became involved in October. We continue to believe there is a strong strategic rationale for Paramounts offer."
Despite Kushner's exit, Paramount's bid continues to receive support from wealth funds managed by three Gulf governments, reportedly Saudi Arabia, Abu Dhabi, and Qatar. Paramount, which owns CBS, MTV, and the streaming service Paramount+, is now led by David Ellison, whose father is a prominent Trump donor. However, President Trump has recently criticized the Ellisons due to his treatment by CBS News' "60 Minutes," remarking on Truth Social, "If they are friends, Id hate to see my enemies!"
Warner is currently evaluating Paramount's proposal and is anticipated to soon inform its shareholders whether this offer surpasses the one from Netflix. The outcome of this high-stakes bidding war could have far-reaching implications for the future of the entertainment industry.
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