David Ellison has a vocal new ally in Ancora Holdings Group, an activist investor that has come out swinging hard against Warner Bros. Discovery‘s $83 billion deal with Netflix — and in favour of Paramount Skydance‘s hostile takeover offer.
Ancora says it is a “nearly $11 billion firm” that holds an approximately $200 million economic interest in Warner Bros. Discovery. That would represent well under 1% of the total shares in WBD.
On Wednesday, Ancora released a presentation outlining the reasons for its “strong opposition” to the proposed sale of WB’s studios and HBO Max to Netflix. Ancora’s presentation is available at this link.
“The currently proposed Netflix-WBD deal asks shareholders to accept inferior value, gamble on an uncertain spinoff [of linear TV networks into Discovery Global] and shoulder significant regulatory risk — despite the availability of a higher value and more certain $30 per share offer from Paramount,” Ancora said on its site opposing the Netflix transaction. “There is a clear pathway for Paramount to submit – and for WBD to accept – a superior proposal. Unless the WBD Board re-engages with all interested parties, Ancora intends to VOTE NO on the currently proposed Netflix deal.”
Whether Ancora’s agitation against a Netflix-WB merger gains any traction among other Warner Bros. Discovery investors remains to be seen. WBD last month had said that more than 93% of shareholders had “rejected Paramount’s inferior scheme” in favor of the deal with Netflix.
In a statement Wednesday responding to Ancora, Warner Bros. Discovery said, “WBD’s experienced and independent Board and management team have a proven track record of acting in the best interests of the Company and shareholders — as evidenced by the extensive actions they have taken to unlock the full value of WBD’s unmatched portfolio of assets over the last year. We remain resolute in our commitment to maximize value for shareholders.”
The announcement from Ancora came a day after the Ellisons’ Paramount upgraded the terms of its hostile $30/share offer for all of WBD (whereas Netflix’s agreement does not include the linear TV group). That included Paramount’s additional promise of paying Warner Bros. Discovery shareholders 25 cents per share — roughly $650 million in cash each quarter — for every quarter the proposed Paramount acquisition of WBD is not closed beyond Dec. 31, 2026. In addition, among other new pledges, Paramount said it would pay the $2.8 billion termination fee due to Netflix if WBD shareholders accept Paramount’s offer.
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Warner Bros. Discovery responded to the revised Paramount takeover offer with boilerplate language saying its board “will carefully review and consider Paramount Skydance’s offer in accordance with the terms of WBD’s agreement with Netflix, Inc.” For now, the WBD board “is not modifying its recommendation with respect to the Netflix Merger Agreement. WBD will review the amended tender offer and advise its stockholders of the Board’s recommendation after the completion of that review.” An answer from WBD’s board to Paramount’s latest offer is due within 10 business days of receipt of the tender offer.
Ancora, based in Cleveland, Ohio, says it is a financial planning, wealth management and institutional asset management firm. In its presentation, which echoes many if not all of Paramount’s talking points, Ancora asserted that the Netflix deal is “flawed, inferior and high risk” and argues that the Paramount proposal includes certainty and can be increased.”
“Paramount has indicated its willingness to improve its proposal — stating that its offer was not ‘best and final’ — demonstrating that there is a value-maximizing path forward,” Ancora said. It also cited Paramount’s “ticking fee” promise to pay WBD shareholders 25 cents per share per quarter in the event a Paramount-WBD deal has not closed by the end of 2026, “demonstrating its confidence and commitment to seeing the deal through.”
“There is a clear path for WBD’s board to re-engage and secure an even higher offer” from Paramount, the Ancora preso said.
It’s worth noting that Ancora Holdings says that it’s a “long-term supporter of union labor and has a history of working with union groups and public pension plans to deliver long-term value.” Hollywood unions include WGA have strongly come out against the Netflix-WB deal, arguing it will eliminate jobs.
Warner Bros. Discovery has not yet set a date for the special shareholders meeting to vote on the Netflix-WB deal. That’s expected to occur in late March or early April.
From Variety US