Hours before Warner Bros. Discovery agreed to sell its studio and streaming assets to Netflix, Ted Sarandos informed WBD CEO David Zaslav that Netflix wouldn’t bid any higher. WBD shareholders have until Jan. 21 to tender their shares to Paramount for $30 in cash, with the possibility of extension. Paramount aims to acquire 51% of WBD shares to control the company, despite the board’s agreement to sell to Netflix. Shareholders must decide whether to tender or not, considering arguments for both sides.

Reasons to tender include believing Paramount’s $30-per-share all-cash offer is more valuable than Netflix’s bid, or wanting to initiate a bidding war. Paramount values Discovery Global at $1 per share, emphasizing the greater value in their offer. Paramount’s bid is all cash, while Netflix’s includes equity with a “collar.” Regulatory concerns also favor Paramount, as a combined Netflix and HBO Max could be anticompetitive.

Shareholders may choose not to tender to maximize upside potential or in the hopes of sparking a bidding war. A mystery bid for Discovery Global suggests potential value far exceeding Paramount’s offer, making the Netflix deal more lucrative. Ensuring WBD splits Discovery Global could be a safe move in case a Paramount-WBD merger is blocked by regulators. Shareholders must weigh these factors in deciding whether to tender or not.

Warner Bros. Discovery’s board rejected Paramount’s $30-per-share bid due to financing concerns, citing more funding from Middle Eastern sources than the Ellison family. Oracle founder Larry Ellison has agreed to guarantee $40.4 billion in equity financing for Paramount’s offer, alleviating some concerns. The Ellisons’ personal equity investment remains at $12 billion, with some WBD executives calling for more personal commitment from the family. The involvement of reputable sovereign wealth funds in the deal may reassure shareholders.

Read more at CNBC: Paramount WBD tender offer: Arguments for and against