Connect with us

Business

Paramount extends tender offer deadline to woo Warner shareholders as proxy fight heats up

Published

on

Paramount extends tender offer deadline to woo Warner shareholders as proxy fight heats up

David Ellison is not abandoning his quest to build a new Hollywood juggernaut.

Ellison-controlled Paramount disclosed Thursday in a regulatory filing that it was extending the deadline of its tender offer for Warner Bros. Discovery stock. The firm had previously asked Warner stockholders to sell their shares to Paramount for $30 apiece by Wednesday.

The new deadline is Feb. 20.

Paramount faces an uphill battle in its pursuit of its larger entertainment industry rival. Investors so far have pledged 168.5 million of Warner’s shares to Paramount, according to Thursday’s filing with the Securities and Exchange Commission. Warner, in a statement, said the response represented only about 7% of its investors.

Advertisement

Paramount also filed proxy materials, saying it would challenge an alternative bid by Netflix at an upcoming special meeting of Warner shareholders to vote on the company’s sale. Warner’s board has not yet set the meeting date but has suggested the pivotal vote could occur by April — pushing the pitched battle for the company into spring.

Warner’s board unanimously agreed on Dec. 4 to sell much of the company to Netflix for $27.75 a share. Before that can happen, Warner must spin off CNN and other basic cable channels into a new publicly traded company called Discovery Global.

The multistep process is giving Paramount a wide window to make its case to Warner shareholders.

Warner Bros. Discovery, in a statement, was dismissive of Paramount’s efforts.

“Once again, Paramount continues to make the same offer our Board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix,” Warner Bros. Discovery said in a statement. “It’s also clear our shareholders agree, with more than 93% also rejecting Paramount’s inferior scheme. We are confident in our ability to achieve regulatory approval for the Netflix merger.”

Advertisement

Paramount has sued Warner Bros. and its chief executive, David Zaslav, in a Delaware court, but the judge turned down Paramount’s request to expedite the legal proceedings to help Paramount make its case to Warner shareholders.

Paramount hopes that, over time, the proxy battle will be more fruitful. It plans to ask Warner shareholders to vote against the Netflix deal at the special meeting. Paramount has also said it would put forth its own slate of directors to be elected during Warner’s annual meeting with shareholders.

“The consideration payable to WBD shareholders in the Netflix transaction falls well short of Paramount’s $30 per share all-cash offer,” Paramount said in Thursday’s announcement.

Billionaire Larry Ellison and his family took control of Paramount in August, determined to become major players in Hollywood.

The following month, the Ellisons began an audacious pursuit of Warner Bros. Discovery. Their goal is to combine two century-old film studios and vibrant television production capabilities and marry such popular TV networks as HBO, CBS, Comedy Central, HGTV and TBS.

Advertisement

Netflix was the surprise suitor after Warner opened the auction to other bidders in late October.

Paramount launched its hostile takeover last month after failing to gain traction with Warner’s board, which remains steadfast in its support for Netflix’s $72-billion proposed purchase of HBO, HBO Max, television production and the Warner Bros. film studio, which led the Hollywood pack in the prestigious Oscar nominations, which were announced Thursday.

Earlier this week, Netflix converted its $27.75-a-share bid to an all-cash offer in hopes of defusing some of Paramount’s criticisms of its deal.

Paramount, which enjoys support from President Trump, has been stressing that Netflix’s regulatory path is uncertain.

Both sides plan to make their case to U.S. and European regulators.

Advertisement

Unlike Netflix, Paramount wants to buy all of Warner Bros. Discovery, including CNN and other basic cable channels. The value of the proposed cable channel company, Discovery Global, factors into the ultimate value that shareholders would receive if the Netflix bid prevails.

Warner’s cable channel spin-off is expected to be completed this summer. The value of the channels is in doubt, giving Paramount ammunition to claim that its $30-a-share tender offer for the entire company was more lucrative than Netflix’s offer for Warner’s studios and HBO.

Business

Heidi O’Neill, Formerly of Nike, Will Be New Lululemon’s New CEO

Published

on

Heidi O’Neill, Formerly of Nike, Will Be New Lululemon’s New CEO

Lululemon, the yoga pants and athletic clothing company, has hired a former executive from a rival, Nike, as its new chief executive.

Heidi O’Neill, who spent more than 25 years at Nike, will take the reins and join Lululemon’s board of directors on Sept. 8, the company announced on Wednesday.

The leadership change is happening during a tumultuous time for Lululemon, which had grown to $11 billion in revenue by persuading shoppers to ditch their jeans and slacks for stretchy leggings. But lately, sales have declined in North America amid intense competition and shifting fashion trends, with consumers favoring looser styles rather than the form-fitting silhouettes for which Lululemon is best known.

“As I step into the C.E.O. role in September, my job will be to build on that foundation — to accelerate product breakthroughs, deepen the brand’s cultural relevance, and unlock growth in markets around the world,” Ms. O’Neill, 61, said in a statement.

Lululemon, based in Vancouver, British Columbia, has also been entangled in a corporate power struggle over the company’s future. Its billionaire founder, Chip Wilson, has feuded with the board, nominated independent directors and criticized executives.

Advertisement

Lululemon’s previous chief executive, Calvin McDonald, stepped down at the end of January as pressure mounted from Mr. Wilson and some investors. One activist investor, Elliott Investment Management, had pushed its own chief executive candidate, who was not selected.

The interim co-chiefs, Meghan Frank and André Maestrini, will lead the company until Ms. O’Neill’s arrival, when they are expected to return to other senior roles. The pair had outlined a plan to revive sales at Lululemon, promising to invest in stores, save more money and speed up product development.

“We start the year with a real plan, with real strategies,” Mr. Maestrini said in an interview this year. “We make sure decisions are made fast.”

Lululemon said last month that it would add Chip Bergh, the former chief executive of Levi Strauss, to its board to replace David Mussafer, the chairman of the private equity firm Advent International, whom Mr. Wilson had sought to remove.

Ms. O’Neill climbed the organizational chart at Nike for decades, working across divisions including consumer sports, product innovation and brand marketing, and was most recently its president of consumer, product and brand. She left Nike last year amid a shake-up of senior management that led to the elimination of her role.

Advertisement

Analysts said Ms. O’Neill would be expected to find ways to energize Lululemon’s business and reset the company’s culture in order to improve performance.

“O’Neill is her own person who will come with an agenda of change,” said Neil Saunders, the managing director of GlobalData, a data analytics and consulting company. “The task ahead is a significant one, but it can be undertaken from a position of relative stability.”

Continue Reading

Business

Angry Altadena residents ask officials to halt Edison’s undergrounding work

Published

on

Angry Altadena residents ask officials to halt Edison’s undergrounding work

Eaton wildfire survivors’ anger about Southern California Edison’s burying of electric wires in Altadena boiled over Tuesday with residents calling on government officials to temporarily halt the work.

In a letter to the Los Angeles County Board of Supervisors, more than 120 Altadena residents and the town’s council wrote that they had witnessed “manifest failures” by Edison in recent months as it has been tearing up streets and digging trenches to bury the wires.

The residents cited the unexpected financial cost of the work to homeowners and possible harm to the town’s remaining trees. They also pointed out how the work will leave telecommunication wires above ground on poles.

“The current lack of coordination is compounding the stress of a community still reeling from the Eaton Fire, and risks causing further irreparable harm,” the residents wrote.

Advertisement

The council voted unanimously Tuesday night to send the letter.

Scott Johnson, an Edison spokesman, said Wednesday that the company has been working to address the concerns, including by looking for other sources of funds to help pay for the homeowners’ costs.

“We recognize this community has already faced a number of challenges,” he said.

Johnson said the company will allow homeowners to keep existing overhead lines connecting their homes to the grid if they are worried about the cost.

Edison’s crews, Johnson said, have also been trained to use equipment that avoids roots and preserves the health of trees.

Advertisement

The utility has said that burying the wires as the town rebuilds thousands of homes destroyed in the fire will make the electrical grid safer and more reliable.

But anger has grown as work crews have shown up unexpectedly and residents learned they’re on the hook to pay tens of thousands of dollars to connect their homes to the buried lines.

Residents have also found the crews digging under the town’s oak and pine trees that survived last year’s fire. Arborists say the trenches could destroy the roots of some of the last remaining trees and kill them.

Amy Bodek, the county’s regional planning director, recently warned Edison that a government ordinance protects oak trees and that “utility trenching is not exempt from these requirements.”

Residents have also pointed out that in much of Altadena, the telecom companies, including Spectrum and AT&T, have not agreed to bury their wires in Edison’s trenches. That means the telecom wires will remain on poles above ground, which residents say is visually unappealing.

Advertisement

“While our community supports the long-term benefits of moving utilities underground, the current execution by SCE is placing undue financial and planning burdens on homeowners, causing irreparable harm to our heritage tree canopy, and proceeding without adequate local oversight,” the residents wrote.

They want the project halted until the problems are addressed.

Edison announced last year that it would spend as much as $925 million to underground and rebuild its grid in Altadena and Malibu, where the Palisades fire caused devastation.

The work — which costs an estimated $4 million per mile — will earn the utility millions of dollars in profits as its electric customers pay for it over the next decades.

Pedro Pizarro, chief executive of Edison International, told Gov. Gavin Newsom last year that state utility rules would require Altadena and Malibu homeowners to pay to underground the electric wire from their property line to the panel on their house. Pizarro estimated it would cost $8,000 to $10,000 for each home.

Advertisement

But some residents, who need to dig long trenches, say it will cost them much more.

“We are rebuilding and with the insurance shortfall, our finances are stretched already,” Marilyn Chong, an Altadena resident, wrote in a comment attached to the letter. “Incurring the additional burden of financing SCE’s infrastructure is not something we can or should have to do.”

Other fire survivors complained of Edison’s lack of planning and coordination with residents.

“I’ve started rebuilding, and apparently there won’t be underground power lines for me to connect with in time when my house will be done,” wrote Gail Murphy. “So apparently I’m supposed to be using a generator, and for how long!?”

Johnson said the company has set up a phone line for people with concerns or questions. That line — 1-800-250-7339 — is answered Monday through Saturday, he said.

Advertisement

Residents can also go to Edison’s office in Altadena at 2680 Fair Oaks Avenue. The office is open Monday to Friday from 8 to 4:30.

It’s unclear if the Eaton fire would have been less disastrous if Altadena’s neighborhood power lines had been buried.

The blaze ignited under Edison’s towering transmission lines that run through Eaton Canyon. Those lines carry bulk power through the company’s territory. In Altadena, Edison is burying the smaller distribution lines, which carry power to homes.

The government investigation into the cause of the fire has not yet been released. Pizarro has said that a leading theory is that a century-old transmission line, which had not carried power for 50 years, somehow re-energized to spark the blaze.

The fire killed at least 19 people and destroyed more than 9,400 homes and other structures.

Advertisement
Continue Reading

Business

Oil Prices Rise as Investors Weigh Cease-Fire Extension

Published

on

Oil Prices Rise as Investors Weigh Cease-Fire Extension

Oil prices rose and stocks moved slightly higher on Wednesday as investors tried to make sense of President Trump’s decision to extend the cease-fire with Iran despite doubts about the status of another round of peace talks.

An adviser to Mohammad Bagher Ghalibaf, the influential speaker of the Iranian Parliament, dismissed the cease-fire announcement, saying that it had “no meaning.” He equated the U.S. naval blockade with bombings, with commercial vessels coming under attack near the Strait of Hormuz, the crucial shipping lane that has been at the center of a growing energy crisis.

Continue Reading
Advertisement

Trending