Paramount Skydance has escalated its acquisition offer for Warner Bros. Discovery (WBD) from $30 per share to $31 per share, as confirmed by WBD today. This latest proposal comes amid a competing bid from Netflix, which aims to acquire WBD's movie studios and streaming operations.
WBD acknowledged that Paramount's improved offer, which includes covering a $7 billion regulatory termination fee in case the merger fails due to antitrust regulations, "could reasonably be expected to lead to a 'Company Superior Proposal.'"
The deal from the company owned by David Ellison includes an additional commitment to pay $0.25 per share for each day the closing of the deal is delayed starting September 30, rather than the initially planned date of December 31. Furthermore, Paramount had earlier agreed to handle the $2.8 billion termination fee that WBD would incur if it decided to retract from its merger deal with Netflix.
Netflix has made a counter-offer of $27.75 per share, targeting a smaller section of WBD's total business. The streaming giant is proposing an all-cash purchase for WBD's film studios, intellectual property, HBO, and its streaming services, such as HBO Max, but would not include other WBD cable channels.
WBD's board has yet to conclude if Paramount's revamped offer presents a more favorable option over Netflixâs bid. Should they determine Paramountâs bid as superior, Netflix would be given a four-day window to propose a better offer.
The willingness of Netflix to increase its bid remains uncertain, particularly as the streaming leader has not commented on Paramountâs latest offer thus far. However, on Friday, Netflix co-CEO Ted Sarandos remarked about the companyâs disciplined purchasing strategy. Speaking to Variety, Sarandos said, âWe have a reputation for such so that Iâm willing to walk away and let someone else overpay for things. We have a rich history of that."
Irrespective of the eventual buyer, any merger involving WBD is anticipated to undergo rigorous regulatory review, potentially lead to increased subscription costs, and bring significant changes to Hollywood's landscape.