A private equity firm owned by President Donald Trump’s son-in-law, Jared Kushner, is no longer backing Paramount’s hostile acquisition bid for Warner Bros. Discovery, the firm confirmed Tuesday.
Days after Warner agreed to be bought by Netflix in early December, Paramount launched a rival bid that seeks to bypass Warner’s management and appeal directly to its shareholders with more money. Paramount is offering $30 per Warner share to Netflix’s $27.75.
Warner, one of the “big five” Hollywood studios, owns Warner Bros. Pictures, HBO, the DC Comics universe and the Harry Potter franchise. Experts say its acquisition could supercharge the winning company and reshape the streaming wars, either by catapulting Netflix further ahead of top competitors or by cementing a new power player in Paramount.
Paramount, which is significantly smaller than Netflix, said its decision to circumvent Warner’s top managers came after they “never engaged meaningfully” with several earlier offers by the company.
Paramount made the details of its new offer public and gave Warner shareholders an option to tender their shares — selling them directly at a set price — in support of its bid. The company is offering to buy Warner’s entire portfolio, including cable networks like CNN that Netflix excluded from its bid.
In its appeal to shareholders, Paramount argued its offer may be more likely to pass regulatory scrutiny from the Trump administration.
The president has said the Warner and Netflix deal “could be a problem” due to the size of the combined market share.
Kushner’s decision to pull his firm’s financial backing takes away a possible Paramount advantage to win over Trump. The amount Kushner’s Affinity Partners was contributing to the offer was not disclosed in Paramount’s latest SEC filings.
“With two strong competitors vying to secure the future of this unique American asset, Affinity has decided no longer to pursue the opportunity,” the firm said in a statement. “The dynamics of the investment have changed significantly since we initially became involved in October. We continue to believe there is a strong strategic rationale for Paramount’s offer.”
Paramount’s bid is still backed by wealth funds run by three governments in the Persian Gulf, widely reported as Saudi Arabia, Abu Dhabi and Qatar.
Paramount, which owns which owns CBS, MTV and the streaming service Paramount+, is newly headed by David Ellison, the son of a major Trump donor. But Trump has recently criticized the Ellisons for his treatment by CBS News’ “60 Minutes.”
“If they are friends, I’d hate to see my enemies!” Trump said Tuesday on Truth Social.
Warner is reviewing Paramount’s offer and is expected to tell shareholders soon whether it’s a better deal than selling to Netflix.
—Hannah Schoenbaum, Associated Press