Paramount Skydance’s latest proposal improves upon its earlier $108.4 billion offer, which valued Warner Bros Discovery at $30 per share. The revised bid is aimed at addressing concerns about financing certainty that Warner Bros had previously raised.
However, the exact revisions were not immediately clear.
Warner Bros and Paramount declined to comment, while Netflix could not immediately be reached.
TL;DR
- Paramount increased its previous $108.4 billion, $30 per share offer for Warner Bros Discovery.
- Netflix agreed to buy WBD for $27.75 per share, valuing it at $82.7 billion enterprise value.
- Shareholders vote March 20, with regulatory scrutiny expected in the US and Europe.
Netflix, which offered $27.75 per share in cash, translating to an enterprise value of approximately $82.7 billion, retains the right to match Paramount’s latest proposal.
A separate report indicated that Warner Bros is expected to review the Paramount offer while continuing to recommend the Netflix agreement to shareholders.
The revised bid signals a deepening battle for control of one of Hollywood’s most valuable content portfolios, which includes titles such as Harry Potter, Game of Thrones, DC Studios, and more.
Previously, the CBS parent was asked to submit its “best and final offer” after Warner Bros rejected an enhanced bid that included covering Netflix’s $2.8 billion termination fee and adding a 25 cent per share quarterly ticking fee starting next year to compensate shareholders for potential delays.
Warner Bros had stated that Paramount’s February 10 offer did not qualify as a superior proposal and set a seven day deadline, until February 23, for a revised submission. Analysts at MoffettNathanson had suggested that an offer near $34 per share could end the bidding war and “avoid further debate over Discovery Global's value.”
Discovery Global Spinoff Debate Adds Complexity To Streaming Merger
A central issue remains Warner Bros Discovery’s plan to spin off its cable television assets, including CNN and HGTV, into a separate company called Discovery Global. Warner Bros estimates the spinoff could deliver between $1.33 and $6.86 per share in value.
Netflix maintains that its proposal provides shareholders added upside from the separation, arguing that Discovery Global would benefit from greater strategic, operational, and financial flexibility as a standalone entity. Paramount, however, has described the cable spinoff as effectively worthless.
Activist investor Ancora Capital, which built an approximately $200 million stake in Warner Bros Discovery, has criticized the company for not adequately engaging with Paramount. The investor warned that if discussions are not reopened, it will vote against the Netflix deal and hold the board accountable at the annual meeting.
Shares of Paramount rose 1.3 percent to $10.70 in extended trading following the developments.
Regulatory Scrutiny And Political Concerns Cloud Final Outcome
Warner Bros shareholders are set to vote on Netflix’s offer on March 20, a decision that could redefine the global streaming landscape.
Even with investor approval, the transaction would face review from US and European competition authorities to determine whether combining Netflix’s global streaming scale with Warner Bros’ century old studio assets would reduce competition or limit consumer choice.
Lawmakers from both parties have raised concerns about potential harm to consumers and creatives.
Paramount said it has secured foreign investment clearance in Germany and is in discussions with regulators in the United States, the European Union, and the United Kingdom. The company has repeatedly argued that its proposal would face fewer regulatory hurdles than Netflix’s.
A Paramount Warner combination would create a studio larger than Disney and unite two major television operators. Some Democratic senators argue such consolidation could result in control over “almost everything Americans watch on TV.”
It would also place CNN under the control of the Ellison family, following their acquisition of CBS News and installation of Bari Weiss as editor in chief.
Topics For More Insights
- Paramount Sweetens $108.4 Billion Warner Bros. Bid With Ticking Fee & Breakup Protection
- Netflix Revises Offer to All-Cash for Warner Bros. Discovery in Bid Battle With Paramount
- Paramount Skydance Sues Warner Bros. Discovery Over Netflix Deal
- Paramount Skydance Offers WBD $108.4 Billion To Snub Netflix’s $72 Billion Bid
For Netflix, acquiring HBO Max would create the largest global streaming platform, with roughly half a billion subscribers. Co CEO Ted Sarandos has voiced confidence in winning approval, stating the deal would avoid job cuts and lower consumer costs through bundled offerings.
However, its argument that it needs Warner Bros to compete with YouTube, America’s most watched TV distributor according to Nielsen data cited by Netflix, is expected to face scrutiny from the US Department of Justice. The Department is also examining whether Netflix engaged in anti competitive practices as part of its broader regulatory review.
As the shareholder vote approaches, the outcome now depends on both investor sentiment and regulatory interpretation of market concentration in an increasingly consolidated streaming industry.
Join The Discussion