Warner Bros. Discovery (WBD) holder Pentwater Capital argues that the entertainment giant’s board had made an error in failing to engage with Paramount Skydance (PSKY) on its revised bid.
Paramount’s $30/share all cash offer is economically superior to Netflix’s (NFLX) offer, Pentwater CEO and Founder Matt Halbower said in an interview with CNBC’s David Faber on Wednesday. Pentwater, the seventh largest holder of Warner Bros. (WBD) with more than 50 million shares, sent a letter to Warner Bros. board on Wednesday.
“I think what they (the WBD board) are doing is wrong,”Halbower said. “If Paramount goes away, then it is a lost opportunity.”
Halbower also believes that the Netflix (NFLX) deal has greater regulatory risk than Paramount’s offer and that the WBD board breached its fiduciary obligations owed to all shareholders.
Halbower expects that Paramount Skydance (PSKY) will come back with an improved offer.
“I think they will likely come back with an improved offer,” Halbower explained. “The purpose of my letter, more than anything else, is to tell the board of directors, hey, I think you’ve done something that’s wrong because it’s just not just the way you should do a deal to tell someone you are not going to negotiate with them when they’ve already told you and the world publicly, hey, it’s not best and final, we are willing to pay more.”Halbower’s comments come after Warner Bros. Discovery (WBD) earlier Wednesday announced that its board has unanimously determined that Paramount Skydance’s (PSKY) amended tender offer was not in the best interests of the media company and its shareholders