Activist investor takes aim at Warner Bros deal with Netflix

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Activist investor Ancora Holdings has taken a $200mn position in Warner Bros Discovery and intends to oppose the Hollywood studio’s agreed $83bn sale to Netflix.

Ancora is expected to argue that WBD’s board has not given adequate consideration to a rival bid from Paramount, according to people familiar with the matter. The company could outline its case in a filing as soon as Wednesday.   

The group’s stake in WBD is less than 1 per cent but Ancora is expected to buy more of the shares. It is also considering launching a proxy battle to enlist support from other investors. 

It marks the latest twist in the battle to land one of Hollywood’s biggest deals, as David Ellison’s Paramount has continued to try to win WBD away from Netflix.

Ancora has previously waged activist campaigns against industrial groups. It opposed US Steel’s agreement last year to sell to Nippon Steel, which ultimately was approved. It also pushed for transport group CSX to pursue a merger following a deal between railways Union Pacific and Norfolk Southern.

Paramount on Tuesday sweetened its $108bn hostile bid for WBD by offering shareholders an additional fee to compensate them if regulators delay completion of the transaction.  

Under the new proposal, WBD investors would receive an extra $0.25 a share — about $650mn — in quarterly payments should the deal fail to close by the end of 2026. Paramount said its enhanced proposal highlighted its confidence in securing approvals.

Paramount stopped short of raising its offer for WBD — a move that analysts say is necessary to sway more shareholders. WBD’s board last month rejected Paramount’s bid, calling it “inadequate”.  

WBD plans a shareholder vote on the Netflix deal by early spring.

If Paramount decides to increase its bid, it would probably do so before the shareholder vote, said people briefed about the matter.

Netflix is facing a US government antitrust review into the WBD deal. Last week co-chief executive Ted Sarandos faced questions in the US Senate over the deal.   

The Wall Street Journal first reported Ancora’s plans. WBD declined to comment. Ancora did not respond to a request for comment.