The battle for Warner Bros. Discovery just got a new combatant.
Activist investor Ancora Holdings (with a ~$200M stake) has officially come out against the Netflix acquisition of Warner Bros. Discovery (WBD), pledging to vote NO at the upcoming shareholder meeting. Instead, Ancora is throwing its weight behind the rival Paramount Skydance bid, calling it the only path to certain value.
🚫 THE BEAR CASE AGAINST NETFLIX: Ancora’s letter to the board is scathing. They argue the Netflix deal asks shareholders to:
- “Accept inferior value” ($27.75/share vs Paramount’s $30/share).
- “Gamble on an uncertain spinoff” (Discovery Global), noting that comparable spinoffs like Versant (Comcast) have crashed 35% post-listing.
- “Shoulder significant regulatory risk” (Antitrust), labeling the Netflix merger a “Hail Mary” that would create a global streaming monopoly with ~500M subscribers.
✅ THE BULL CASE FOR PARAMOUNT: Ancora supports Paramount’s argument that “cash is king.”
- The Certainty: Paramount’s all-cash offer ($30/share) doesn’t rely on the performance of a spun-off cable asset.
- The Sweeteners: They explicitly endorsed Paramount’s recent move to cover the $2.8 billion breakup fee and add a “ticking fee” for delays.
- The Regulatory Path: Ancora believes Paramount has a clearer road to DOJ approval, having already certified compliance with the “Second Request.”
💡 ANALYST TAKEAWAY: Ancora may own less than 1%, but their voice amplifies the fears of many institutional holders: Is the Netflix deal actually closable? By highlighting the collapsing stock price of Versant (CNBC/Comcast spinoff), Ancora is effectively saying that the “stub equity” in the Netflix deal is worthless. This puts immense pressure on the WBD board to reopen talks with Paramount or risk a failed shareholder vote in April.
👇 Arb Traders: Do you agree that the antitrust risk for a Netflix/WBD merger is fatal, or is Ancora just trying to force a higher bid?