By Brett M. Decker

About the author: Brett M. Decker is a New York Times best-selling author and the Endowed Chair of Leadership at Northwood University. He is a former editor and editorial page writer for The Wall Street Journal.

Warner Bros. Discovery shareholders suddenly find themselves at the center of one of the most unusual media M&A battles in decades. After WBD's board selected Netflix as its preferred acquirer last week, Paramount launched a hostile counter campaign directly to WBD investors, arguing that its offer is both richer and structurally superior. But will that case ultimately resonate with shareholders?

Paramount's offer has obvious upsides. At $30 per share, or $108 billion, it exceeds Netflix's $27.75 per-share price, and it was structured as a whole-company acquisition. Netflix, by contrast, targeted only WBD's studio and streaming crown jewels, essentially leaving its cable networks, including CNN, and several other lucrative legacy assets behind.

Paramount offered what investors often prize above all else: a cleaner, full-company transaction, allowing for streamlined integration and more flexibility in financing structure and postmerger deleveraging. That point won't be lost on investors, who are evaluating WBD's mix of high-margin library assets and still-profitable cable networks.

Paramount appears willing to raise its offer even further to secure the deal. But the headline offer price likely isn't shareholders' only, or even primary, consideration. They will also be looking for where the highest realizable value truly lies. Such considerations especially come into play in a hostile acquisition environment, where boards are expected to take the highest value reasonably achievable.

In acquisition battles, the question is never simply whether each company can eventually close a deal and for what amount. It is also how quickly each company can close amid pressure from regulators and antitrust officials. On this point, the contrast between WBD's two bidders couldn't be sharper.

Trump administration officials have said that Paramount was the administration's preferred bidder from the start. Netflix, by contrast, is already confronting a significant level of antitrust scrutiny. President Donald Trump has expressed concerns about a Netflix acquisition and said his administration will "play an active role" in determining who ultimately buys WBD.

The president also insisted on Wednesday that any buyer should be prepared to also acquire CNN, something only Paramount has offered to do.

All of these factors could influence the probability of closing, and the speed at which closing comes. For a risk-arbitrage community that trades on regulatory predictability and deal timing, these differences mean something.

The shareholder base of WBD today looks very different from the base that existed before the first reports of a potential sale surfaced in September. Many longtime investors have already recovered their basis and earned substantial gains. Some have seen their positions double or even triple. The prospect of realizing those gains sooner rather than later is appealing for obvious reasons.

At the same time, merger arbitrage funds have entered the stock in greater numbers, building large positions as the deal spread has begun to turn on regulatory timing and bidder reliability. For that class of investor, the expected duration of a transaction can materially affect returns. A deal that clears regulators in six months carries a different economic value than one that faces a prolonged, uncertain review cycle.

Boards, for their part, aren't obligated to pursue the highest nominal offer. They are required, however, to weigh whether a competing proposal presents a reasonably attainable path to greater shareholder value. That assessment often turns on a blend of price, certainty, and expected time to close -- particularly in transactions where the shareholder base has shifted toward investors who prioritize timing.

If Paramount ultimately prevails, whether through negotiation or a direct appeal to investors, it will likely be because shareholders judged its bid to offer a clearer or faster route to value. If it fails, it will be because the board concluded that Netflix's structure, even with potential regulatory delays, better aligns with WBD's long-term strategy.

In contested media deals, time horizons and risk tolerance frequently shape the result as much as headline offer price. The purchase of WBD will likely reaffirm a familiar lesson in corporate finance: When boards and shareholders interpret risk differently, markets have a way of pushing those positions back into alignment.

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December 16, 2025 10:19 ET (15:19 GMT)

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