Warner Bros opens door to Paramount after higher offer
Warner Bros Discovery says Paramount has raised the price of its takeover offer to US$31 ($A44) per share, setting the stage for a new bidding war with Netflix over the future of the Hollywood giant.
The company had previously offered US$30 ($A43) per share when it first went out with its hostile all-cash bid directly to Warner shareholders in December, just days after Warner struck a deal to sell its studio and streaming business to Netflix for US$27.75 ($A39.40) per share.
Beyond increasing the proposed purchase price, Warner said on Tuesday afternoon local time that Paramount had increased its statutory termination fee to US$7 billion ($A9.9 billion).
Paramount also agreed to increase the previously promised “transition fee” to be paid to shareholders if its deal does not go through by the end of September; this amount is 25 cents per share, or a total of US$650 million ($923 million).
Warner had previously confirmed it had received a revised offer and was reviewing it, after briefly restarting talks with Paramount.
In announcing the increased price, Warner said Paramount’s revised offer “could reasonably be expected to result in” a superior offer as defined under its existing deal with Netflix; However, the company’s board of directors has not yet decided whether Paramount’s offer is better than Netflix’s offer.
A Netflix spokesperson declined to comment.
The acquisition of Warner Bros Discovery will reshape Hollywood and the broader media landscape; It will bring HBO Max, cult favorites like Harry Potter, and possibly even CNN under a new roof, depending on who wins the Netflix-Paramount feud.
Paramount wants to buy all of Warner Bros., including networks like CNN and Discovery.
But Netflix only wants to buy Warner’s studio and streaming business. Warner’s board has repeatedly supported the deal and maintained Tuesday that its deal with Netflix is still valid.
But if Warner’s board later decides Paramount’s offer is superior, it will have four days to match or revise Netflix’s offer. He may also choose to walk away.
Paramount, Warner and Netflix have spent the last few months engaged in a heated back-and-forth feud over who has the stronger deal.
But many lawmakers and entertainment industry groups have raised alarm, warning that a purchase of all or part of Warner’s business would further consolidate power in an industry currently dominated by just a few big players.
Critics say it could lead to job losses, less diversity in filmmaking and potentially more headaches for consumers facing the rising costs of streaming subscriptions in their current form.
All of this combined raises antitrust concerns, and a sale of Warner may depend on who gets the regulatory green light.
The US Department of Justice has already initiated investigations, and other countries are expected to follow suit.
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