Paramount Skydance is reportedly set to reevaluate its merger negotiations with Netflix, possibly increasing its offer for Warner Bros. Discovery (WBD) by about 10%, according to the Post.
Founders David and Larry Ellison, after creating Paramount Skydance through a merger earlier this summer, are contemplating raising their all-cash proposal from $30 to $33 per share for WBD, which encompasses Warner Bros., HBO, and CNN, as stated by an insider.
This new offer, totaling nearly $86 billion, would also sufficiently cover the $2.8 billion breakup fee WBD would incur if the Netflix merger falls through, sources revealed.
The Ellisons are eager to add at least $2 more per share this week to finalize a deal with WBD shareholders, who have been engaged in “hostile” discussions with other parties, as noted by those privy to the situation.
A source close to the Ellison family remarked, “They won’t be easily swayed, but they’re definitely prepared to raise the stakes.”
Executives from Paramount Skydance, along with partners from Redbird Capital, co-managed by the Ellisons and media dealmaker Jerry Cardinale, have yet to make any official decisions on increasing their offer. The company intends to hold off until December 22, waiting for WBD’s board to respond formally to its proposal. Paramount Skydance asserts that its $30 share offer is preferable to Netflix’s $30.75 bid that includes both cash and stock for Warner Bros. studios and HBO Max.
The Ellisons have cited “regulatory certainty” as a reason for their claim, pointing out the overlap in streaming services with Netflix.
Meanwhile, Netflix is also contemplating a counter-offer for WBD, in case Paramount Skydance chooses to act, according to a knowledgeable source.
Despite the uncertainty around the bidding, David Zaslav, CEO of Warner Bros. Discovery, mentioned that if Paramount Skydance offers $35 a share, he and his board would consider the deal. Still, sources familiar with Paramount Skydance’s position indicate that the $35 figure—which evaluates WBD at over $90 billion—is not currently on the table. Interestingly, Zaslav previously sought a valuation of at least $30 per share during the intense bidding competition.
No official comments have been made by representatives from Paramount Skydance or Zaslav’s team, nor from Netflix.
Both camps have engaged legal teams to sway media narratives in their favor. Reports indicate that Netflix CEO Ted Sarandos has even consulted with President Trump regarding potential regulatory approvals from the Justice Department’s Antitrust Division.
The Ellisons have a presence in Washington, D.C., with Larry Ellison being a long-standing supporter of the president.
On a legal front, the Ellisons and Redbird maintain that their cash offer for the entire company is more advantageous, emphasizing minimal antitrust issues related to their bid.
Reports suggest that Trump hopes to manage the CNN network differently, potentially supporting the Ellisons in adopting a more centrist approach, as seen in the CBS subsidiary led by independent journalist Bari Weiss.
As for Netflix, since it will not absorb WBD’s cable assets, those will be separated into a newly formed company managed by existing WBD leadership, including CNN’s current head. Paramount Skydance argues that this spin-off won’t offer WBD shareholders the $3 per share required to meet Netflix’s $30.75 bid.
Netflix contends that any antitrust concerns are not a major factor, believing that the streaming aspect is just one part of a broader viewing landscape that includes platforms like YouTube and various social media. Additionally, investors could stand to gain up to $4 per share from the spin-off, given the continued profitability of assets like CNN.
