Why hostile takeovers make headlines and cause headaches for management
Posted on: Dec 06, 2025 09:04 IST | Posted by: Cbc
Paramount Skydance makes uncongenial call for charles dudley warner Bros. Find after Netflix move
Paramount Skydance CEO David Ellison says the headline-making hostile takeover bid his company made for Warner Bros. Discovery on Monday is better than what streaming giant Netflix is offering.
"By every metric you can look at, we believe that our offer is superior to shareholders," he told CNBC's Squawk on the Street, after the $108 billion US proposal was unveiled.
The shareholders need to be convinced of that because, in a hostile takeover bid, they're the group a would-be buyer must win over, not management.
The hostility is in the "eye of the beholder," said Kai Li, a professor of finance at the University of British Columbia.
Now, she says, management will face the pressure of whether to support the push from Paramount Skydance.
The Warner Bros. Discovery board of directors said Monday it will "carefully review and consider" the offer, but also that it's "not modifying its recommendation" of the Netflix agreement.
Li says the management of a company being targeted in a hostile takeover can have competing interests to consider — as their own positions and careers may be thrown into upheaval if such a deal goes through.
That's because the incoming buyer would then be in a position of deciding what to do with the management that had opposed the deal.
That contrasts with a scenario in which management supports a deal and may be involved in negotiating the post-deal arrangements, in less adversarial circumstances.
Hostile takeovers have occurred in a variety of industries. Those involving large companies often draw media attention.
Elon Musk's successful effort to buy Twitter, now called X, is one recent example. The company's leadership was fired almost immediately after he took control in late 2022. The board of directors were also booted, days after Musk took the helm.
In 2020, the Canadian-based GardaWorld launched a hostile takeover bid for G4S, a rival security company. That effort failed, however, as G4S drew interest from another buyer, Allied Universal, which ultimately took control of the company, in a deal approved by shareholders in 2021.
Could Netflix’s Warner Bros. Discovery deal kill movie theatres?
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