Feb. 25 (UPI) — Warner Bros. Discovery announced Tuesday that Paramount Skydance has raised its purchase offer to $31 per share, which may top Netflix’s offer.
WBD last week said it would reopen talks with Paramount, and Netflix granted a 7-day waiver that ended Monday to allow shareholders a chance to get clarity on the offer. Netflix kept matching rights.
Netflix and Paramount have been trying to buy WBD since October. After a bidding war between Netflix and Paramount, WBD accepted Netflix’s bid on Dec. 5. Soon after, Paramount launched a hostile bid to buy WBD, but the board didn’t budge. Then Paramount announced that Oracle creator Larry Ellison would back the deal with $40 billion in equity. On Jan. 20, Netflix changed its offer to all cash, then on Feb. 10, Paramount did the same and added some extras.
That offer is what led to the discussion window, and now WBD is analyzing the new $31 offer.
Netflix wants to buy the WBD studio and streaming business, while Paramount wants to buy all of Warner Bros.
“Following engagement with [Paramount] during the seven-day limited waiver period, we received a revised PSKY proposal to acquire WBD, which we are reviewing in consultation with our financial and legal advisors,” WBD said Tuesday morning in a statement. “We will update our shareholders following the Board’s review. The Netflix merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction.”
Later in the day, WBD said the new offer is all cash $31 per share and includes a $7 billion regulatory termination fee that Paramount will pay if the sale doesn’t close due to regulation. It also includes the $2.8 billion termination fee that WBD would have to pay to Netflix, and a 25 cent daily ticking fee that takes effect Sept. 30. The previous offer started the ticking fee in 2027.
“The Board has not made a determination as to whether the revised PSKY proposal is superior to the merger with Netflix,” WBD said in a statement. “WBD will engage further with PSKY to determine if a proposal that constitutes a ‘Company Superior Proposal,’ as defined in the Netflix Merger Agreement, can be reached.”
If WBD determines that Paramount has made the better offer, Netflix would have four days to raise its bid. Netflix’s December offer was $27.75 per share, which made the value of Warner Bros. at $82.7 billion.
Both potential mergers would need federal and European regulatory approval. The size of the two companies has raised antitrust concerns.
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