Hollywood's century-old mergers and acquisitions add new variables! Activist fund "raids" Warner Bros. (WBD.US) and opposes Netflix acquisition.

According to media reports citing sources familiar with the matter, the radical activist investment firm Ancora Holdings Group has swiftly established a stock investment position in Hollywood streaming media and film production leader Warner Bros. Discovery (WBD.US). The details of this position and Ancora's plans are currently unknown, as representatives of Ancora and Warner Bros. have not immediately responded to requests for comment. Sources familiar with the matter revealed that this newly invested and potentially influential activist investment firm plans to oppose a recent acquisition deal made by Warner Bros. management with streaming giant Netflix (NFLX.US). According to this deal, Warner Bros. will sell its film and television production studios as well as its HBO Max streaming service to Netflix. Warner Bros. management recently stated in a press release that they plan to seek shareholder approval for the acquisition deal with Netflix before April. The company will hold its annual shareholders' meeting in a few months and elect directors, which could render any proxy fight irrelevant. Warner Bros. is a target of competing acquisition offers from Netflix and another Hollywood film production giant, Paramount Skydance Corp. The company has agreed to sell its film and television production studios and HBO Max streaming service to Netflix for $27.75 per share as part of a deal worth $82.7 billion, including debt, and plans to later spin off traditional cable TV networks such as CNN and TNT to its shareholders. Paramount Skydance Corp., led by tech scion David Ellison and crucially supported by his billionaire father, Oracle Corporation founder and CEO Larry Ellison, is currently planning to make a higher bid of $30 per share, or a value corresponding to a $108.4 billion enterprise value, seeking to acquire the entire Warner Bros. company. This latest development signals a major complication in this Hollywood mega-acquisition. The involvement of activist investors typically signals an attempt to increase the intensity of tender offers or raise the stakes in negotiations. The timing of Ancora's entry into the stock market may suggest that they are pushing for a higher bid and potentially impacting the situation in favor of a higher offer or better terms. Ancora reportedly has established a position of $200 million and is inclined to oppose Netflix's acquisition plan and advocate for a more serious consideration of Paramount Skydance's acquisition plan, and may even engage in a proxy fight. Ancora and similar activist funds often use aggressive tactics such as shareholder letters, public statements, or proxy fights to pressure management into maximizing shareholder value. So, Ancora's short-term entry into the stock market may have a bullish effect on Warner's stock price, bringing short-term fluctuations and potential unexpected upside; but it does not automatically imply a "big rise" imminent, as the stock price has been strongly anchored by the acquisition offer, and the outcome depends on factors such as (a) the emergence of a stronger bid, (b) shareholder voting and board processes, and (c) regulatory review and completion of the transaction. For Netflix, successfully acquiring Warner Bros. would mean having a vast library of IP assets.