Netflix’s Warner Bros. deal us under fire. Why the odds are shifting in Paramount’s favor.
Netflix and Paramount Skydance softened their offers to Warner Discovery Bros. last month. It’s still anyone’s guess who will win the blockbuster takeover battle.
Users of online prediction markets now see this as a head-to-head race. As of Monday, Polymarket’s event-based agreement showed a 45% chance that Netflix would go through with the deal and a 37% chance that Paramount would complete the acquisition. There was an 18% chance of no deal by June 30, 2027.
Polymarket has a data partnership with Dow Jones, publisher of Barron’s.
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On January 17, Paramount had just a 7% chance of closing the deal.
Rates have changed for several reasons. First of all, Netflix may have difficulty getting the regulatory permission needed to close the acquisition. At a Judiciary Committee hearing earlier this month, several Republican and Democratic senators said they were concerned the deal could lead to higher costs and fewer options for consumers.
Second, Paramount has taken steps to increase its hostile bid. CBS’ owner said last week it would increase its $30-a-share offer with a so-called 25-cent-per-share fee. The fee, which equates to approximately $650 million in cash each quarter, will be paid to Warner shareholders for each quarter in which the transaction is not completed after the end of 2026.
All of this may lead Warner to reconsider. Members of the company’s board of directors are considering restarting talks with Paramount after receiving the latest amended offer, Bloomberg News reported Sunday, citing people with knowledge of the matter.
Warner did not immediately respond to Barron’s request for comment.
Netflix agreed to buy Warner’s studios and streaming assets in December for $27.75, and Discovery Global cable assets were distributed to investors. Last month, the tender was made entirely in cash.
Paramount tried to one-up the video streamer by submitting a hostile tender offer for all of Warner Discovery. The company has repeatedly told investors that its offer was higher because it believed Discovery shares would have no equity value.
Write to George Glover at george.glover@dowjones.com
