A private equity company linked to Jared Kushner, President Donald Trump’s son-in-law, has withdrawn its support for Paramount’s hostile takeover bid for Warner Bros. Discovery, the firm announced on Tuesday. Following Warner’s acceptance of an acquisition deal with Netflix in early December, Paramount initiated a rival bid aiming to bypass Warner’s leadership and engage directly with its shareholders by offering a higher price of $30 US per Warner share compared to Netflix’s $27.75 US.
Warner, a major player among Hollywood studios, possesses valuable assets like Warner Bros. Pictures, HBO, the DC Comics universe, and the Harry Potter franchise. Industry experts suggest that the acquisition of Warner could significantly impact the competitive landscape in the streaming industry, potentially bolstering Netflix’s position or establishing Paramount as a new influential player.
Paramount, though smaller than Netflix, decided to approach Warner’s shareholders directly after facing a lack of meaningful engagement from Warner’s management in response to previous offers. Paramount made its revised offer public, inviting Warner shareholders to sell their shares at a set price to support its bid, which includes acquiring Warner’s entire portfolio, including assets like CNN that were excluded from Netflix’s bid.
In its pitch to shareholders, Paramount highlighted the possibility of its offer obtaining approval from the Trump administration’s regulatory bodies, citing concerns raised by President Trump regarding the size of the combined market share resulting from the Warner-Netflix deal. The decision by Kushner’s firm to withdraw its financial support eliminates a potential advantage for Paramount in winning favor with Trump, although the specific amount contributed by Kushner’s Affinity Partners remains undisclosed in Paramount’s recent SEC filings.
Paramount’s bid retains the backing of sovereign wealth funds managed by three Middle Eastern governments, reportedly including Saudi Arabia, Abu Dhabi, and Qatar. The company, which also owns CBS, MTV, and the streaming platform Paramount+, is now under the leadership of David Ellison, the son of prominent Trump supporter Larry Ellison. However, Trump recently criticized the Ellisons for their treatment by CBS News’s “60 Minutes,” expressing his sentiments on Truth Social.
Warner is currently assessing Paramount’s offer and is expected to communicate its recommendation to shareholders shortly, determining whether the bid presents a more favorable option compared to selling to Netflix.