Paramount Skydance is marking a significant step forward as its bid to acquire Warner Bros. Discovery has navigated initial regulatory challenges, clearing the waiting period mandated by the Department of Justice.
On February 19, the studio confirmed that it passed the Department of Justice’s Hart-Scott-Rodino (HSR) waiting period, indicating the proposal’s progress. According to The Wrap, this should be taken seriously.
The date in February signifies an extension requested by the government. After Paramount’s initial offer, the Justice Department’s antitrust division designated December 23 as the first hurdle. However, more information was requested right before that deadline, causing the waiting period to reset to February 19. Now that this date has come and gone, that means the proposal has cleared a significant legal barrier.
On Friday, Paramount stated: “There are no legal barriers in the United States preventing the completion of Paramount’s proposed acquisition of WBD.”
While this statement is technically accurate, other challenges remain, and just because the waiting period has passed doesn’t eliminate the possibility of further scrutiny or action from the Department of Justice.
Netflix has accused Paramount of attempting to “mislead shareholders” with its announcement.
“Paramount Skydance is continuing to distort facts and distract shareholders. The milestones that HSR outlines do not signify approval from the Department of Justice or that any decisions have actually been reached,” said David Heyman, Netflix’s Chief Legal Officer, on Friday. “We are still a long way from actually obtaining the necessary approvals.”
As it stands, Warner’s board continues to support a deal with Netflix, but they remain receptive to further proposals from Paramount. Netflix has also acknowledged that Warner might still evaluate Paramount’s offer.
In early February, Paramount proposed a “ticking fee” of 25 cents per share to Warner shareholders, which amounts to $650 million, in response to an earlier bid. Additionally, the studio committed to paying Netflix a proposed $2.8 billion installment under a prior studio-streaming merger contract.
Yet, Warner has once more turned down Paramount’s offer of $30 per share, with Paramount hinting it could increase this to $31 per share, compared to Netflix’s offer of $27.50 per share, which has been tentatively accepted by Warner.
Netflix continues to assert that Paramount misrepresented its offer to Warner and emphasizes that Paramount is under scrutiny regarding its recent merger with Skydance.
Moreover, several industry insiders have voiced concerns that allowing Netflix to acquire Warner poses a significant risk to the film industry.
For instance, renowned director James Cameron recently warned that a deal with Netflix could spell “disaster” for Hollywood.
“I firmly believe that selling Warner Bros. Discovery to Netflix could have severe repercussions for the theatrical film industry, which I have committed my life’s work to,” he remarked this week. “While my films are also shown in the video market later, my true love is cinema.”
