Warner Bros Discovery deems Paramount takeover bid superior to Netflix deal
The move could spark a fresh bidding war over Warner.
Warner Bros Discovery has determined that Paramount’s latest takeover offer is superior to the streaming and studio agreement it struck with Netflix, marking a stark shift in momentum in the fight for the Hollywood giant.
The owner of HBO Max, DC Studios and popular titles like Harry Potter had backed Netflix’s proposal for months, but after Skydance-owned Paramount raised its rival bid for the entire company to 31 dollars per share, in addition to other revisions, Warner’s board on Thursday said the offer “constitutes a ‘company superior proposal’”.
“We are pleased WBD’s board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing,” Paramount chief executive David Ellison said in a statement.
That could mean the start of a fresh bidding war over Warner. Netflix has four business days to try to match Paramount’s proposal to further revise its offer — which currently stands at 27.75 dollars per share for Warner’s studio and streaming business.
Warner on Thursday maintained that Netflix’s bid remains on the table, and its board “has not withdrawn or modified its recommendation”.
The fight for Warner is complicated because Netflix and Paramount want different things. Unlike the streaming giant, Paramount wants all of Warner’s operations, including networks like CNN and Discovery.
The companies have spent the last couple of months in a heated, public back and forth over who has a stronger deal, and Thursday’s announcement arrived shortly after Paramount upped the ante on its offer.
Beyond increasing its proposed purchase price for Warner, the company also agreed to a regulatory termination fee of 7 billion dollars (£5 billion), and Paramount pledged to move up a previously promised “ticking fee”.
The company had said it would pay 25 cents per share for every quarter the deal drags on past the end of the year. Now it has agreed to pay that amount if the deal does not go through by the end of September, Warner said.
