Paramount Global extended its tender deadline for Warner Bros. Discovery shares to May 9 and filed preliminary proxy materials Thursday, formalizing a proxy fight against Netflix's competing $38 billion offer for the same target. The move signals David Ellison's willingness to burn capital on a shareholder campaign rather than raise his $29 billion cash-and-stock bid.
Paramount's original tender was set to expire April 25. The new deadline buys three weeks to circulate materials arguing Warner shareholders should reject Netflix's all-cash structure in favor of Paramount's equity component, which would give Warner holders a stake in the combined streaming entity. Netflix submitted its rival bid April 18, offering $42 per share in cash against Paramount's $35 equivalent at Wednesday's close. Warner shares closed Thursday at $39.20, suggesting the market prices a 62 percent probability Netflix prevails or a third bidder emerges.
The proxy filing matters because it converts this from a tender race into a shareholder governance fight. Paramount is now arguing that Netflix's bid, while higher in nominal terms, strips Warner holders of participation in future streaming consolidation upside. The Ellison camp is pointing to Warner's $41 billion in gross content assets and 127 million global subscribers as undervalued in a pure cash exit. Netflix would absorb those subscribers into its 269 million base and likely shutter overlapping corporate functions within six quarters. Paramount's pitch is that a combined Paramount-Warner entity would have 240 million subscribers and enough scale to negotiate carriage and licensing as a true Netflix peer, preserving optionality for Warner shareholders who take Paramount stock.
The tactical risk for Paramount is that proxy fights cost $15 million to $40 million in advisory and legal fees, and success rates in contested M&A situations run below 40 percent when the competing offer is 10 percent or more higher in cash value. Ellison is betting that Warner's board and large institutional holders—Vanguard owns 8.4 percent, BlackRock 6.1 percent—will prioritize strategic logic over the $3 per share spread. That is not a safe bet. Vanguard and BlackRock index funds typically vote with management recommendations, and Warner's board has not yet formally endorsed either bid. If Warner's independent directors issue a fairness opinion favoring Netflix on pure valuation grounds, Paramount's proxy effort collapses.
Allocators should watch for Warner's board response by April 30, the SEC's standard ten-day window for target response to a competing bid. Any announcement of a go-shop period or a request for revised Paramount terms would signal the board sees Netflix's price as a floor, not a ceiling. Also watch for whether Paramount files definitive proxy materials by May 2, which would trigger a shareholder meeting within 30 to 45 days. If Paramount skips the definitive filing and instead raises its bid to $40 per share or higher, the proxy fight was a negotiating feint, not a real campaign.
Warner's enterprise value at $39.20 per share is $94 billion including net debt of $55 billion. Netflix is effectively paying 1.6 times trailing revenue for a subscale competitor it can integrate in 18 months. Paramount is offering 1.2 times revenue in a stock deal that preserves Warner's brand and requires 36 months to extract synergies. The difference is tempo, not thesis.