Paramount Skydance just raised its offer for Warner Bros. Discovery, trying to outbid Netflix, according to Reuters.
This new proposal tops Paramount’s earlier $108.4 billion bid, which worked out to $30 a share for the whole company. It’s supposed to make Warner Bros. Discovery feel more confident about how the deal gets financed, but Reuters didn’t say exactly what changed.
Paramount Skydance Raises Bid for Warner Bros Discovery
Both Warner Bros. and Paramount kept quiet, and Netflix hasn’t replied to requests for comment.
Netflix’s own offer sits at $27.75 a share in cash, valuing Warner’s studio and streaming at $82.7 billion. The deal allows Netflix to match any higher bids. Variety says Warner Bros. Discovery is reviewing Paramount’s new offer but, for now, still recommends the Netflix deal to shareholders.
This whole showdown centres around some of Hollywood’s most valuable assets, think Harry Potter, Game of Thrones, and other big-name franchises. And really, it’s just the latest battle over who gets to dominate the streaming world.
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Backing Paramount’s bid is Oracle’s Larry Ellison. Reuters says Warner Bros. pushed Paramount to put its best and final offer on the table after rejecting an earlier version.
That last proposal included covering Netflix’s $2.8 billion break fee and adding a 25-cent-per-share “ticking fee” every quarter starting next year, meant to make up for any delays shareholders might face.
Warner Bros. didn’t consider Paramount’s February 10 offer better than Netflix’s and gave them until February 23 to try again. Meanwhile, Warner Bros. wants to split off cable channels like CNN and HGTV into a new company called Discovery Global.
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According to company estimates, the spinoff could be worth anywhere from $1.33 to $6.86 a share. Netflix claims its offer gives shareholders more upside from that split, but Paramount argues the cable spinoff isn’t worth much.
Warner Bros. Discovery, run by David Zaslav, is also dealing with pressure from activist investor Ancora Holdings, which owns about $200 million worth of shares. Reuters reports Ancora criticized Warner Bros. for not talking enough with Paramount and threatened to vote against the Netflix deal unless the company reopens talks.
After all this, Paramount’s shares climbed 1.3% to $10.70 in after-hours trading.
Shareholders will vote on Netflix’s offer March 20, but the deal still needs regulatory approval in the US and Europe.
Regulators will be looking closely at whether combining Netflix with Warner’s studio and HBO Max gives them too much power, especially with concerns about how it could affect both consumers and the industry.
(With inputs from Reuters)
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