Activist Investor Puts Heat on Warner Bros. Discovery to Reject Netflix Offer For Inferior Value

Activist investor Ancora Capital, led by CEO Fred DiSanto, has revealed a major stake in Warner Bros. Discovery and is pressuring the studio to abandon its deal to merge with Netflix.

Holding a WBD stake at around $200 million, Ancora said it will vote against the proposed merger between Netflix and the rival studio as it backs a rival offer from Paramount. The activist investor in a presentation argued the currently proposed Netflix-WBD deal offers investors inferior value, an uncertain spinoff of legacy media assets and regulatory risk.

“WBD is asking shareholders to vote for an uncertain final cash consideration based on an unknown debt allocation and an unknown equity value of the Discovery Global spinoff,” the activist investor argued (see its presentation here). “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.”

The activist investor entering the Hollywood takeover battle for WBD follows Paramount on Feb. 10 sweetening its offer for the major studio with a fee for shareholders and a promise to pay a $2.8 billion termination fee.Paramount’s current offer includes an increased$43.6 billionof equity commitments from theEllison familyandRedBird Capital Partnersand$54.0 billionof debt commitments fromBank of America, Citigroup and Apollo.

That follows Paramount launching a hostile bid for WBD after the studio had accepted Netflix’s all-cash $72 billion offer, or $27.75 a share, for its studios and streaming business. Paramount has since begun an appeal to WBD shareholders to reject the merger deal, calling Netflix’s bid “inferior,” and asking them to reject the Discovery spinoff and to reject the pay packages for senior WBD executives, including CEO David Zaslav.

Ancora in its presentation on Tuesday argued Netflix touts its ability to secure regulatory approval for a takeover of WBD, but the Ellison family, including Larry Ellison, father of Paramount CEO David Ellison,has the inside track in Washington D.C. and at the White House.

“Paramount has been reportedly viewed as the current administration’s “favored” bidder – suggesting stronger political support,” the activist investor insisted in its presentation. Ancora called for the WBD board to see the advantage Paramount has and “fully engage once again” with the Ellisons, with an eye to an agreed deal and Netflix possibly sweetening its own offer.

“Assuming the parties can reach an acceptable deal package, Netflix would then have an opportunity to either match, raise or walk under the merger agreement. So, WBD can make this determination to engage with Paramount without having to terminate the Netflix deal to do so,” Ancora argued.

WBD in a statement on Tuesday said in the wake of the Ancora intervention: “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.”

Netflix expects WBD stockholders to vote on its proposed transaction by April 2026.

Feb. 11, 7 a.m. Updated with a statement from Warner Bros. Discovery.