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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Day, baq a podcast. Good morning,

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Speaker 2: It's Tuesday, the ninth of descent. But I'm Caroline Hepkitt

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Speaker 2: in London and.

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Speaker 3: I'm Stephen Caroline Brussels. Coming up today. The US media

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Speaker 3: giant Paramount makes a hostile bid for Warner Brothers Discovery,

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Speaker 3: challenging rival Netflix.

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Speaker 2: European leaders grow closer to an agreement on using frozen

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Speaker 2: Russian assets to back Ukraine.

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Speaker 3: Plus the billionaire family behind Volkswagen risks delaying the carmaker's

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Speaker 3: recovery amidstrained cash flows.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 3: The US media giant Paramount has launched a hostile takeover

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Speaker 3: bid for Warner Brothers Discovery, just days after the company

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Speaker 3: agreed to a deal with Netflix. The offer stands at

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Speaker 3: thirty dollars a share in cash, compared with Netflix's cash

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Speaker 3: and stock bid of just under twenty eight dollars per share.

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Speaker 3: US President Donald Trump, whose son and law Jared Kushner,

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Speaker 3: is participating in the Paramount bid, has downplayed his involvement,

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Speaker 3: saying he's not close to Paramount or Netflix.

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Speaker 2: I have to see what percentage of market they are.

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Speaker 2: We have to see the Netflix percentage of market, paramount

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Speaker 2: the percentage of market. I mean, none of.

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Speaker 3: Them are particularly great friends in mine. President Trump speaking

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Speaker 3: there from the Oval Office and a paramount wants to

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Speaker 3: buy all of Warner Brothers, while Netflix is seeking only

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Speaker 3: the Hollywood studios, HBO and the streaming business. If paramounts

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Speaker 3: but as successful, it wouldn't need approval from the FCC

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Speaker 3: or Congress. Its combined shares with Warner Brothers in the

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Speaker 3: streaming market would be lower than in the Netflix deal,

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Speaker 3: according to Bloomberg Intelligence.

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Speaker 2: Now European leaders are growing confident they will reach a

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Speaker 2: deal to use frozen Russian assets to back a ninety

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Speaker 2: billion euro reconstruction loan for Ukraine, but there is still

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Speaker 2: a gulf between Ukraine's European allies and the US on

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Speaker 2: providing security guarantees Sakiev to protect the country from future

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Speaker 2: Russian aggression. It comes after talks in London with the

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Speaker 2: leaders of the UK, France and Germany and Ukraine's President Vladimizelinski,

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Speaker 2: who emphasized cooperation. Thinks which are worried were inventing unity.

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Speaker 4: Vivian Europe and Ukraine and also rooted between Europe, Ukraine

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Speaker 4: and the United States.

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Speaker 2: Forssatae which we can't manage without Berners, things which we

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Speaker 2: can't menge without Europe, and that's what we need to

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Speaker 2: makes half important decisions. Ukraine's Vladimizelinski there, who left London

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Speaker 2: to head to Brussels and onto Italy today. The next

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Speaker 2: stage in the plan on Frosian Russian assets is a

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Speaker 2: leader's meeting in Brussels on the eighteenth of December.

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Speaker 3: The US President has given Nvidia his approval to ship

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Speaker 3: its H two hundred AI chips to China in exchange

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Speaker 3: for a twenty five percent SIR charge. In a social

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Speaker 3: media post, Donald Trump said the Chinese president Shei Jenping,

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Speaker 3: had responded favor to the move, which could see the

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Speaker 3: world's most valuable company regain billions of dollars in last

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Speaker 3: business from a key global market. Here's Bloomberg's Annabel droolers,

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Speaker 3: this is.

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Speaker 5: Actually the sharpest pivot we've seen yet on China's access

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Speaker 5: to this technology. I think the key question, and what

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Speaker 5: we've been discussing on warning is really even with H

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Speaker 5: two hundred sales, will Chinese companies be allowed to purchase

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Speaker 5: they weren't allowed to purchase H twenty, but at the

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Speaker 5: same time, H two hundred is a significantly more advanced

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Speaker 5: ship than H twenty, which was designed specifically for the

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Speaker 5: mainline market.

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Speaker 3: Donald Trump paut of the chipments would only go to

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Speaker 3: approved customers, and the chip makers such as Intellent AMD

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Speaker 3: would also be eligible. Democratic senators, including Elizabeth Warren, have

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Speaker 3: criticized Trump's move, warning that giving China the new chips

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Speaker 3: would be a colossal economic and national security failure.

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Speaker 2: Now, Unilever's new spin off, the Magnum ice Cream Company,

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Speaker 2: was valued lower than some analysts expected in its debut

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Speaker 2: on the Amsterdam Stock Exchange. Magnum shares closed at twelve

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Speaker 2: euros ninety seven each on Monday, giving the company a

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Speaker 2: market value of seven point nine to four billion euros.

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Speaker 2: Shares also debuted in London and New York as part

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Speaker 2: of the triple listing. Bloomberg's Freddie Fullston has.

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Speaker 6: More just under eight billion euros. The market cap of

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Speaker 6: what is now the world's largest stand alone ice cream

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Speaker 6: company came out lower than analysts expected on Monday. Magnum,

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Speaker 6: which was formerly Unilever's least profitable division, wants to use

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Speaker 6: its new independence to focus on growth amid an uptick

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Speaker 6: in health conscious consumers. The company's CEO said Magnum needed

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Speaker 6: to grow one to two percent faster. Analysts at Jeffrey's

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Speaker 6: as humor more settled. Price won't be established until at

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Speaker 6: least next week. In London, Freddie Fulston Bloomberg Radio.

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Speaker 3: US treasury reels climbed to the highest and more than

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Speaker 3: two months on Monday, comes with a slump and global

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Speaker 3: barns ahead of the Federal Reserve interest decision tomorrow. Some

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Speaker 3: traders have Warren to the US Central Bank may signal

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Speaker 3: a slower pace of easing ahead. Traders and I see

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Speaker 3: a roughly ninety percent chance of the Central Bank called

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Speaker 3: deliver a third straight quarter point reduction to interest rates

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Speaker 3: to a range of between three and a half and

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Speaker 3: three point seventy five percent. Tenure Treasury yields up a

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Speaker 3: basis point this morning at four point one seven percent.

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Speaker 2: Black Friday discounts failed to prevent a slow down in

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Speaker 2: UK retail sales, adding to evidence that speculation of tax

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Speaker 2: rises ahead of the autumn budget damaged consumer confidence. A

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Speaker 2: report by the British Retail Consortium shows total retail sales

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Speaker 2: increase by just one point four percent year on year

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Speaker 2: in November. That was below the twelve month average and

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Speaker 2: the weakest pace since May. The CEO of the group,

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Speaker 2: Helen Dickinson, said that pre budget jitters among shoppers met

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Speaker 2: the month of Black Friday did not deliver as strongly

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Speaker 2: as retailers had hoped.

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Speaker 3: Those are your top stories on the markets. The I

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Speaker 3: Asia Pacific Index is down by half of one percent.

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Speaker 3: The Hangksang's one point three percent lower. This morning. Tech

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Speaker 3: shares are weighing on that index. The Hangksang Tech Index

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Speaker 3: down by one point nine percent. European stock futures a

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Speaker 3: little after this morning pretty flat on Wall Street. We

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Speaker 3: talked about treasury eels rising further today. Bimberg Dollar spot

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Speaker 3: index flat as Fed policymakers go into their decision. The

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Speaker 3: euro a touch stronger at one sixteen forty three.

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Speaker 2: Those are the markets. In a moment, we'll be discussing

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Speaker 2: why the family controlling Europe's largest car maker is worried

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Speaker 2: about dividend payments. But before that, want to get to

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Speaker 2: our top story. This is the bidding war for Warner Brothers.

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Speaker 2: Discovery Paramount's sky Dance has Now made a hostile bid

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Speaker 2: of thirty dollars per share in cash versus Netflix's offer

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Speaker 2: in cash and stock. Manual by Gory, who leads our

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Speaker 2: deals team in Asia, joins us now for more. Manuel,

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Speaker 2: good morning. There are two bids on the table. What

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Speaker 2: happens next?

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Speaker 4: Two bids on the two Indeed, what a fascinating story. Uh,

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Speaker 4: what a fascinating deal that we have here. It's just

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Speaker 4: a tremendous right, It's just uh, you know, all the ingredients,

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Speaker 4: all the great ingredients that we as journalist and observers

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Speaker 4: want to see in a magnificent deal of this caliber.

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Speaker 2: What's next?

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Speaker 4: Well, there is a biding war, and is in any

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Speaker 4: bidding war, you know, the next steps the next few

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Speaker 4: days will be a key.

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Speaker 2: Uh.

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Speaker 4: Paramount has said that they want to give ten days

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Speaker 4: for Warner Brothers to UH to evaluate the proposal. Obviously,

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Speaker 4: you know, two different proposals on the table, one for

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Speaker 4: the whole company in cash by Paramount, the other one

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Speaker 4: for some of the assets combining cash and stock by Netflix. Now.

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Speaker 4: Obviously there is a lot of work behind the scenes

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Speaker 4: with investors, banks, you know. Obviously there is a political

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Speaker 4: angle here, regular regulatory angle as well. So it's just

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Speaker 4: a lot of moving pieces. It's a little bit hard

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Speaker 4: to say how this one is gonna play out. But obviously,

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Speaker 4: you know, even Donald Trump made some comments to the

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Speaker 4: potential problem so to speak, that a deal with Netflix

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Speaker 4: may encounter from anti trust. So one wonders whether you

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Speaker 4: know that gives and wiggle room for Paramount to make

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Speaker 4: their case. And obviously, now the big question market is like,

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Speaker 4: you know, if you're a shareholder of Warner Brothers, do

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Speaker 4: you want to take the cash and the superior offer

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Speaker 4: for the whole company or do you believe in the

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Speaker 4: potential Netflix combination cash and stock. And obviously Netflix has

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Speaker 4: been a growth story for many years, and obviously Warner

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Speaker 4: Brothers would spin off some of the assets as they

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Speaker 4: previously disclosed. So two different proposals. I guess there is

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Speaker 4: going to be a lot of back and forth also

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Speaker 4: with some of the key investors, and a lot of

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Speaker 4: education right from both sides to explain the merits of

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Speaker 4: each bid.

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Speaker 3: Yeah, indeed, and you mentioned those key anti trust issues

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Speaker 3: as well, which are being focused too. We've also been

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Speaker 3: reporting manuel on how the story of the Paramount bid

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Speaker 3: came together, and it involves Jared Koshner, the son and

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Speaker 3: now President Trump.

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Speaker 4: Yes, indeed, and his firm, Affinity Partners, they've been very

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Speaker 4: active on various deals. We've seen them popping on more

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Speaker 4: and more this. The reality is, obviously there is a

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Speaker 4: political angle here, and also bear in mind that there

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Speaker 4: is you know, a few Middle Eastern funds. We've seen

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Speaker 4: Guitar Investment Authority, a fund from Abu Dhabi as well,

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Speaker 4: also back in paramount. Obviously there is like some prominent

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Speaker 4: investors like Apollo Banks, City Group, Bank of America also

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Speaker 4: backing the bed as well. And you know, you've got

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Speaker 4: other high profile names like Redbird Capital Partners or Solarialison,

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Speaker 4: which at some point this year was the world's richest

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Speaker 4: person also backstopping some of the financing there. So some

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Speaker 4: really big names. There is definitely the more broader geopolitical

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Speaker 4: angle into it as well. Yeah, just just tons of

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Speaker 4: great ingredients for a fascinating story to follow. But it's

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Speaker 4: gonna be interesting to see how Warner Brothers respond to

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Speaker 4: this because obviously they also on the board needs to

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Speaker 4: respond to the ultimate benefit of you know, what's best

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Speaker 4: for shareholders, right, so that will be definitely the key

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Speaker 4: to any transaction bid ultimately ends up being superior. And now,

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Speaker 4: obviously there could be all their moves, right like what

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Speaker 4: if Netflix makes a move and tries to increase the bid,

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Speaker 4: or whether another country bidder shows up. Obviously there has

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Speaker 4: been reports to Comcast also was looking at it, so

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Speaker 4: there could be other interesting twists and turns on this situation. Again,

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Speaker 4: I think the next few days and weeks will be

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Speaker 4: quite critical, and then, needless to say, the regulatory approvals,

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Speaker 4: you know, that could be a bit of a bumpy

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Speaker 4: road as well.

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Speaker 2: Yeah, some of us are observers saying that this is

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Speaker 2: really all about the future of Hollywood, of what is

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Speaker 2: going to shape this kind of entertainment landscape in the US. Manuel,

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Speaker 2: Thanks for being with us. Manuel by Gory, who leads

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Speaker 2: our deals team in Asia covering the Bidding Wolf for

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Speaker 2: Warner Brothers Discovery. Stay with us. More from Bloombery Daybake

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Speaker 2: You coming up after this.

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Speaker 3: Before we get into our next story, Carlin, I just

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Speaker 3: wanted to mention something that I've been reading this morning

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Speaker 3: from our food editor Kate Crater as well. She has

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Speaker 3: a warning more for you than for me, actually, if

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Speaker 3: you're planning on going essentially anywhere in London before Christmas.

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Speaker 3: If you haven't booked, good luck finding a table now.

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Speaker 3: She's been looking at some of the polling data which

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Speaker 3: says that people in London are actually eating out less,

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Speaker 3: or people in Britain rather eating out less because of

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Speaker 3: cost of living concerns compared to a year ago. But

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Speaker 3: actually some of the restauranteurs that she's spoken to are

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Speaker 3: telling an opposite story. The CEO of Hawksmore was speaking

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Speaker 3: to Bloomberg Television recently said bookings are up around fifteen

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Speaker 3: percent compared to last year. Other big well known restauranteurs

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Speaker 3: in London saying it's about five percent higher as well now,

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Speaker 3: the CEO of Hawksmore saying that perhaps this is people

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Speaker 3: trying to cheer themselves up going into a Christmas season

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Speaker 3: after maybe a difficult year financially as well. It's one

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Speaker 3: of the things I have to said don't miss about

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Speaker 3: London as you do have to book restaurants very far

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Speaker 3: in advance.

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Speaker 2: Yeah, I haven't have walked past the Fowksmore in St

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Speaker 2: PANCRASONI yesterday and I perused the menu, which actually was

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Speaker 2: in a nice glass box outside. You do have to

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Speaker 2: book early. I get that if you're going to be

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Speaker 2: spending big. You know, you want to know that it's

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Speaker 2: going to be lovely personally, I'm trying to return to

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Speaker 2: the dying art of the dinner party, but I love

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Speaker 2: Kate Craidor's piece.

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Speaker 3: Open a linked in our podcast show Notes. Let's turn

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Speaker 3: it to another story recovering this morning. The family that

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Speaker 3: controls Volkswagen risks delaying the carmaker's recovery by pushing for

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Speaker 3: dividends during an overhaul. Creating profits at VW and Porsche

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Speaker 3: have put Hans Michelle Peek on edge about dwindling payments.

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Speaker 3: Our German Altos a porter. Monica Raymonds joins us now

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Speaker 3: for more. Monica, good morning. Can you first explain the

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Speaker 3: background to this to us? Why are the families so

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Speaker 3: reliant on dividends from the VW group.

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Speaker 1: So, the Porsche and pH families, through their holding business,

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Speaker 1: they have a majority control of the voting shares at Volkswagen,

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Speaker 1: and through that family holding company, they get much of

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Speaker 1: the dividends that come from Volkswagen and now from from Portia.

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Speaker 1: And those dividend payments have long supported the families some

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Speaker 1: thirty members, and as those dividends shrink, that means the

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Speaker 1: families are getting less and less of a payout.

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Speaker 2: And so the question whether this could push to derail

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Speaker 2: the recovery at v W.

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Speaker 1: Yes. So that's the risk that Volkswagen faces right now

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Speaker 1: that this push for dividends could really slow or gum

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Speaker 1: up Volkswagen's recovery. The German car industry has had several

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Speaker 1: challenges to tackle, and Volkswagen really has seen some of

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Speaker 1: the biggest challenges. The family's interest in maintaining dividends threatens

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Speaker 1: to stall the bigger changes to make this uh, this

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Speaker 1: company a lot more competitive. The issue is that Volkstegen

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Speaker 1: is really under major margin pressure, not just from cyclical

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Speaker 1: factors like US tariffs or economic slowdown in China, but

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Speaker 1: also from really changing structures within the auto industry. The

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Speaker 1: car industry is switching to EVS, software is becoming a

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Speaker 1: lot more important. There are new business models coming up,

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Speaker 1: and a lot of this requires heavy spending and quick action.

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Speaker 1: Now the family is a bit reticent to make drastic

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Speaker 1: changes because those bring risks, and those can also impact

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Speaker 1: how big those dividends are.

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Speaker 3: Monica, what about the outlook from here for the company.

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Speaker 3: Will some of those challenges ease over time or what's

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Speaker 3: the expectation.

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Speaker 1: So Volkswagen is taking is making efforts to make a

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Speaker 1: lot of changes, but it's really being squeezed from all

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Speaker 1: directions and a lot of these pressures and disruptions are really.

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Speaker 2: Long term challenges.

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Speaker 1: So we're seeing the company is face seeing issues in China.

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Speaker 1: After the pandemic, they sort of lost sight of all

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Speaker 1: the changes that were taking on the taking part on

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Speaker 1: the Chinese market and that meant that they lost a

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Speaker 1: lot of market share there and they're not They're struggling

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Speaker 1: to keep up with Chinese competitors. Essentially, in Europe they're

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Speaker 1: facing rising energy and materials costs, higher labor costs, and

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Speaker 1: in the US we have the tariff impact folks. Fagan

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Speaker 1: is expecting that the total costs are going to be

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Speaker 1: about five billion this year.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 3: stories making news from London to Wall Street and beyond.

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