(Feb 12): Activist investor Ancora Holdings Group is urging the board of Warner Bros Discovery Inc to reject the offer by Netflix Inc and reconsider a competing bid by Paramount Skydance Corp, adding a new plot twist to one of Hollywood’s biggest takeover battles.
Ancora, an US$11 billion ($13.88 billion) fund that has a history of inserting itself in deals, has amassed a stake in Warner Bros worth about US$200 million, the firm said in a statement on Wednesday. Warner Bros was valued at about US$69 billion as of Tuesday, indicating Ancora’s stake in the company is less than 1%. Still, the push from Ancora could galvanise investors who have been weighing whether to tender their shares to Paramount’s hostile bid at an upcoming shareholder meeting or back the board’s support for Netflix.
Warner Bros is the target of dueling takeover offers from Netflix and Paramount in a saga that has dragged out for months and has the power to reshape the entertainment industry. The company has already agreed to sell its studios and HBO Max streaming service to the streaming giant for US$27.75 a share, an US$82.7 billion transaction including debt, and plans to spin off cable networks like CNN and TNT to its shareholders.
But Paramount, led by technology scion David Ellison with backing from his billionaire father Larry Ellison, has been pursuing Warner Bros for even longer and has taken its all-cash US$30-a-share offer — with an enterprise value US$108.4 billion for the entire business, including the cable network assets — directly to shareholders.
Paramount sweetened the terms of its offer for Warner Bros on Tuesday by agreeing to pay the US$2.8 billion termination fee Warner Bros would owe Netflix if the deal falls apart. To underscore Paramount’s confidence that it will get swift regulatory approval for its offer, the company also added a “ticking fee” of 25 cents a share payable to Warner Bros shareholders for each quarter its deal hasn’t closed after Dec 31. It will also backstop a Warner Bros debt refinancing and pay US$1.5 billion in fees associated with that, if necessary.
Ancora raised several concerns about Netflix’s offer in the presentation on Wednesday, calling its cash offer “inferior” and questioning whether it has the “political relationships” that Paramount has within the Trump administration. The Cleveland-based investor also warned that Netflix’s practice of filming outside the US is a risk to the nation’s film jobs and said the deal would face greater antitrust scrutiny than one with Paramount.
See also: Paramount offers to pay US$2.8 bil breakup fee in Warner deal
“The WBD board now has no choice but to deem Paramount’s amended offer as one that could reasonably be expected to result in a superior proposal, given Netflix’s presently inferior proposal and unaddressed regulatory issues,” Ancora said.
Once that happens, the board could then engage in good faith with Paramount to maximise shareholder value, paving the way for Warner Bros to secure an even higher offer, according to Ancora.
If the Warner Bros board refuses to do this, “Ancora will vote ‘no’ on the inferior Netflix deal and seek to hold the Warner Bros board accountable at the 2026 annual meeting.”
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Warner Bros has said it plans to ask shareholders to vote on the Netflix deal by April. The company’s annual general meeting where directors are elected will take place months after that, potentially rendering any proxy fight moot.
Warner Bros’ “experienced and independent board and management team have a proven track record of acting in the best interests of the company and shareholders”, Warner Bros said in a statement. “We remain resolute in our commitment to maximise value for shareholders.”
Ancora has previously advocated for CSX Corp to pursue a merger after rivals Union Pacific Corp and Norfolk Southern Corp announced their merger.
Last year, Ancora ran a campaign to try to force US Steel Corp to abandon its sale to Nippon Steel. The activist investor ended up dropping the fight a few months later, and US Steel ultimately closed the deal.
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