The board of Warner Bros. Discovery on Wednesday said it was recommending that shareholders reject the hostile takeover bid from Paramount Skydance and its controlling shareholders, the Ellison family.
The company’s board said in a statement that it determined the Paramount Skydance offer “is not in the best interests of WBD and its shareholders.”
The Warner Bros. board’s recommendation to shareholders effectively means Paramount’s offer is dead. Paramount could, however, return with a higher offer.
I’m confused. I thought the hostile takeover was supposed to work by appealing to the shareholders directly, presumably through some mechanism that allows a vote. If it just went back to the same board that had rejected their previous offers and accepted the deal from Netflix, how was this “hostile takeover” any different from a normal bid?
The vote is happening. The board is recommending the shareholders vote a certain way. The shareholders don’t have to take their recommendation (but usually do). This is usually how shareholder votes happen.
Trump will reject Netflix bid and force the sale to Paramount.
He hasn’t got the juice to do that anymore
If you can put together a group of shareholders that together have a majority voting stake in the company, you can force a vote against the board’s leadership wishes. It seems like they could not muster the votes.
Yeah, I’m pretty certain the whole “board not approving” thing is one of the main things that makes it a hostile takeover?
What I’ve seen in the past is that the board will disapprove of the takeover, and the other company will acquire enough shares to have enough sway to vote on members of the board. New board members (and old board members once they’ve made their own deals to get what they want out of whatever restructuring is planned) approve of the takeover bid and basically force the remaining shareholders into accepting the terms.
I’m definitely not the most knowledgeable person about such matters, though, others may have a better explanation.