Warner Bros. Discovery Evaluates New Offer from Paramount
Warner Bros. Discovery Evaluates Revised Offer from Paramount
Warner Bros. Discovery (WBD) confirmed today that it has received a revised proposal from Paramount and is currently reviewing the offer with the guidance of its financial and legal advisors. The terms of this latest bid have not been disclosed.
Paramount’s initial offer, which has been on the table for some time, was set at $30 per share in cash. Reports indicate that the company has since increased its proposal.
In a statement, WBD mentioned, “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. WBD shareholders are advised not to take any action at this time with respect to the amended PSKY tender offer.”
This statement mirrors previous communications as Paramount has continued to refine its offer, addressing concerns regarding debt and equity financing expressed by WBD. So far, the board, led by David Zaslav, has consistently advised against a deal with Paramount, urging shareholders to remain loyal to Netflix. A special meeting for stockholders to vote on the Netflix agreement is scheduled for March 20.
The context surrounding this new proposal has shifted slightly, following a seven-day limited waiver period that allowed both parties to engage in discussions, contingent upon Netflix’s agreement to participate.
On December 5, Warner Bros. Discovery agreed to sell its studios and streaming assets to Netflix in a transaction valued at $27.75 per share, representing an enterprise value of approximately $82.7 billion. Concurrently, WBD is preparing to spin off its cable business into a new entity named Discovery Global, with plans to distribute shares of this new company to its shareholders.
Just three days after the announcement of the Netflix deal, Paramount initiated a hostile tender offer, proposing $30 per share in cash for all of WBD, with an enterprise value of $108 billion, igniting a competitive battle.
On January 20, Netflix adjusted its offer to an all-cash bid.
WBD holds a fiduciary duty to consider all proposals.
In a recent SEC filing, WBD noted that Paramount was willing to increase its offer to $31 or higher, expecting confirmation in writing during negotiations that are set to continue until 11:59 p.m. ET tonight, unless extended. Netflix retains the right to match any incoming offers. Many analysts speculate that Paramount may elevate its bid to $31 or $32 a share, but some believe a higher amount may be necessary to finalize the deal.
More updates will follow as the situation develops.
