Shares of Paramount Skydance (PSKY) and Netflix (NFLX) are sinking in midday trading on Wednesday as the two media companies emerge as top bidders and are expected to butt heads for Warner Bros. Discovery’s (WBD) assets.
NFLX is currently the second-biggest decliner on the benchmark S&P index and fell as much as 6.7%, hitting its lowest since April; PSKY is down over 5%; and WBD is marginally in the red.
A Tuesday report by The New York Post said that if WBD leans towards Netflix’s offer, Paramount has a “Plan B,” which involves, among other things, convincing WBD shareholders that the rival deal is “doomed to fail” under Trump DoJ review.
The NYP report said that WBD could pick a winning bidder as early as this week.
Netflix said bundling its service with WBD’s HBO Max would lower costs for consumers and that WBD’s board has really warmed up to the streaming giant’s cash offer, according to recent reports. However, the White House recently raised concerns that the combination of the two may stifle competition in the market.
On the other hand, David Ellison-led Paramount is expected to get the WBD deal cleared easily due to strong ties with the Trump administration.
Paramount’s cash bid will be backed by the Ellison Family, Apollo Global (APO), Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority, and the Abu Dhabi Investment Authority, according to reports.
Ellison today also dropped out of the New York Times DealBook Summit, saying that he needs to focus on his efforts to buy WBD.