Warner Bros. Discovery Considers Paramount’s Revised Offer

Feb. 25 — Warner Bros. Discovery (WBD) announced that Paramount Skydance has increased its offer to acquire the company to $31 per share, potentially surpassing what Netflix has proposed.

Last week, WBD shared that it would restart discussions with Paramount, while Netflix allowed for a seven-day waiver period for shareholders to clarify their competing offer, maintaining its matching rights.

Since October, both Netflix and Paramount have been in pursuit of acquiring WBD. Initially, WBD accepted Netflix’s bid on December 5 after a bidding competition. Shortly thereafter, Paramount made a hostile offer, but WBD’s board remained steadfast. It was also revealed that Oracle’s founder, Larry Ellison, would support Paramount’s deal with $40 billion in funding. On January 20, Netflix switched to an all-cash offer, leading Paramount to enhance its own proposal with additional benefits on February 10.

This new offer has prompted WBD to evaluate the $31 proposal from Paramount.

While Netflix aims to acquire WBD Studios along with its streaming arm, Paramount’s interest lies in acquiring all of Warner Bros.

In a recent statement, WBD mentioned, “During the seven-day limited waiver period, the Company received the amended PSKY offer to acquire WBD and is considering it in consultation with the Company’s financial and legal advisors. Following the Board’s review, we will provide an update to shareholders.” They also noted that the Netflix Merger Agreement remains in effect and the Board continues to favor the Netflix transaction.

LATER the same day, WBD confirmed that the new offer includes $31 per share in cash, alongside a $7 billion deregulation fee from Paramount if regulatory issues prevent the sale. Additionally, there’s a $2.8 billion termination fee payable to Netflix and a $0.25 per day ticking fee starting September 30, which differs from the previous proposal that set ticking fees beginning in 2027.

WBD clarified, “The board has not determined whether PSKY’s revised proposal is superior to a merger with Netflix,” adding that it aims to explore whether Paramount can present a proposal that meets the criteria of a ‘superior proposal’ under the Netflix agreement.

If WBD finds Paramount’s offer more appealing, Netflix will have four days to submit a counter-bid. Netflix’s last offer in December was for $27.75 per share, putting Warner Bros.’ valuation at $82.7 billion.

It’s important to note that both potential mergers will require approval from federal and European regulatory bodies, as the size of each company raises significant antitrust concerns.