Warner Bros. Discovery is reopening discussions with Paramount, owned by Skydance, to consider their “best and final” proposal, while continuing to support the agreement made with Netflix for their studio and streaming services. Following a regulatory filing, Warner Bros. Discovery has received permission from Netflix to engage with Paramount for seven days or until the upcoming Monday to address any outstanding issues and clarify certain terms of Paramount’s latest offer. Despite rejecting previous bids from Paramount, Warner Bros. remains steadfast in its commitment to the Netflix merger, as emphasized by Chairman Samuel DiPiazza Jr. and CEO David Zaslav in a letter to the Paramount board.
The agreement with Netflix, valued at $72 billion in an all-cash transaction, encompasses the acquisition of Warner’s TV and film studios, as well as HBO Max, with an enterprise value of around $83 billion. Paramount, on the other hand, has insisted on acquiring Warner’s entire business, including networks such as CNN and Discovery, with an offer of $77.9 billion made in December.
While both companies have expressed confidence in their respective deals, Paramount has indicated its willingness to enhance its bid to $31 per share pending further discussions. Paramount has also introduced additional incentives, such as a “ticking fee” and the commitment to cover Warner’s proposed breakup payout to Netflix. The potential sale of Warner’s extensive content library, featuring iconic titles like “Casablanca” and “Citizen Kane,” as well as popular TV shows like “Game of Thrones,” has garnered industry attention and regulatory scrutiny.
As the special meeting for shareholders approaches, scheduled for Friday with a vote on the Netflix merger set for March 20, Warner Bros.’ stock rose over two percent, Paramount Skydance saw a nearly three percent increase, and Netflix experienced a slight uptick in its stock value. The outcome of these negotiations will have a significant impact on the entertainment landscape, shaping the future of these industry giants.