Warner Bros. Discovery signals a revised Paramount bid could be superior to its Netflix deal, escalating a bidding war with political dimensions.
NEW YORK: Warner Bros. Discovery has received a revised acquisition proposal from Paramount Skydance. The board stated the new bid “could reasonably be expected to lead to” a superior proposal compared to its existing deal with Netflix.
This legal threshold allows for more formal negotiations with Paramount. The revised offer includes a purchase price of $31.00 per share in cash.
This marks a one-dollar-per-share increase from Paramount’s earlier offer, valued at around $108 billion. Paramount has also offered to cover a $2.8 billion termination fee Warner Bros. would owe Netflix.
It pledged an additional $7 billion fee payable to Warner Bros. should the transaction fail on regulatory grounds. The Warner Bros. board stressed it has not yet concluded Paramount’s offer is superior.
It will continue talks with Paramount to determine if that bar can be met. If it is, Netflix would have four business days to submit a counter-offer.
Warner Bros. earlier stated its deal with Netflix “remains in effect”. Board members “continue to recommend in favor of the Netflix transaction” and have not withdrawn that advice.
Shareholders were advised to take no action while the review is ongoing. Netflix’s current offer is valued at $83 billion for a more limited merger.
It is expected to be prepared to raise its bid to match the rival’s new offer. The bidding war has drawn attention from the White House.
President Donald Trump insists he will have a say on the outcome. Paramount is run by David Ellison and financed largely by his father, Oracle tycoon Larry Ellison, a longtime Trump ally.
Trump has said he will be “involved” in any merger decision. The US Department of Justice is currently reviewing Netflix’s proposed acquisition.
European and other regulators will also have their say. A Paramount victory would see news outlet CNN pass to Ellison family control.
Trump late Saturday called on Netflix to fire board member Susan Rice. He warned the company to “pay the consequences” after her political comments.
Netflix co-CEO Ted Sarandos addressed the threat in a BBC interview. “This is a business deal. It’s not a political deal,” Sarandos told BBC Radio 4.
