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Warner Bros Discovery said a new $31-a-share buyout offer from Paramount Skydance Corp could lead to a better deal than its existing agreement with Netflix, kicking off another potential round of bidding for the famed Hollywood studio.<\/p>\n
Warner Bros isn\u2019t withdrawing its recommendation that investors support Netflix\u2019s $27.75-a-share agreement to buy the company\u2019s studio and HBO operations, according to a statement Tuesday. Instead, it\u2019s saying the latest Paramount terms meet the threshold for further talks.<\/p>\n
Paramount\u2019s latest salvo shows the company, led by David Ellison, isn\u2019t dropping its pursuit of Warner Bros. anytime soon. The sweetened offer will test Netflix\u2019s willingness to pay up for the Warner Bros\u2019 production studios and a library that includes the DC Comics franchise and Game of Thrones.<\/em><\/p>\n \u201cThe board has not made a determination as to whether the revised\u201d Paramount proposal is superior to the merger with Netflix, Warner Bros said. It plans more talks with Paramount and said Netflix will have four business days to respond if the board backs the sweetened offer.<\/p>\n The board\u2019s decision came after a seven-day period in which Paramount was allowed to once again negotiate with Warner Bros Paramount has been seeking to acquire the parent of HBO and CNN since September, raising its offering price multiple times and making changes to the terms requested by the Warner Bros board.<\/p>\n ADVERTISEMENT<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n The two companies were still negotiating late into last night and had to hang up the phone at midnight when the discussion window expired, according to people with knowledge of the matter. That left lingering questions that the parties can now address.<\/p>\n The revised Paramount proposal marks an increase of $1 from the company\u2019s previous $30-a-share offer, which was valued at about $108 billion including debt. Netflix\u2019s proposal is valued at $82.7 billion on that basis, though Warner Bros believes a spinoff of its cable channels will deliver additional value to its investors.<\/p>\n Paramount\u2019s latest proposal includes a \u201cticking fee\u201d of 25 cents per share for each quarter after September 30. that the deal hasn\u2019t received regulatory approval, along with a $7 billion payment to Warner Bros. if regulators block the sale. Paramount also reaffirmed it would take care of the $2.8 billion termination fee that Warner Bros would have to pay to Netflix if it scraps its deal with the streaming service.<\/p>\n \u201cParamount welcomes the WBD Board\u2019s determination and looks forward to continuing to engage constructively with WBD to deliver the benefits of Paramount\u2019s proposal to WBD shareholders, the creative community and consumers,\u201d it said in a statement late Tuesday.<\/p>\n Paramount also agreed to contribute more equity if any of its lenders used doubts about its solvency to avoid funding the deal, and it won\u2019t use the deterioration of Warner Bros\u2019 cable networks as an excuse to renege on the deal.<\/p>\n Shares of Warner Bros. were down less than 1% in extended trading after the announcement, possibly because some investors were expecting more. Paramount rose more than 1% and Netflix about 0.5%.<\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Ellison, Paramount\u2019s chief executive officer, launched a tender offer to acquire Warner Bros shares in December, days after the Netflix deal was announced. The move by Ellison, 43, followed his $8 billion August takeover of Paramount, the owner of CBS and MTV.<\/p>\n Studios like Paramount and Warner have been under pressure to combine, hurt by declining revenue from traditional media services like cable television and movie theaters. After spending heavily to build up streaming services, studios have cut production and jobs to push those newer operations to profitability.<\/p>\n Warner Bros said in October it was considering all of its options after receiving unsolicited interest from multiple parties. Paramount, Netflix and Comcast Corp. were among the bidders interested in acquiring all or part of Warner Bros.<\/p>\n The bidding got contentious, with Paramount accusing Warner Bros. of running an auction that favored Netflix. Some Warner Bros. shareholders, including Pentwater Capital Management and Ancora Holdings, had publicly advocated for the company to re-engage in talks with Paramount.<\/p>\n \u00a9 2026 Bloomberg<\/p>\n Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n