Paramount raises the stakes in battle with Netflix
Warner Bros. Discovery says Paramount Skydance’s revised $31-per-share offer is superior to its current deal with Netflix, giving the streaming giant four business days to respond or walk away from a bidding war for the coveted Hollywood studio.
The high-stakes fight could reach its final stage after Thursday’s announcement.
Netflix earlier this month granted Warner Bros. a seven-day waiver to get the “best and final offer” for the company from Paramount.
Warner Bros. said that under the terms of the Netflix merger agreement, this notice begins a four business day period during which Netflix can propose revisions to the agreement.
Shares of Paramount Skydance rose more than 1.5 percent in extended trading.
Netflix, which is looking to buy Warner Bros.’ streaming and studio businesses, agreed in December to pay $27.75 per share, saying the offer would deliver greater shareholder value along with the planned split of Warner Bros. cable assets.
The offer depends partly on the debt level of these assets, which will be listed separately as Discovery Global, and the equity value of the company once it begins trading.
In its revised offer, Paramount also increased the termination fee it would pay if the deal fails to gain regulatory approval from $5.8 billion to $7 billion.
Netflix, which had approximately $9.03 billion in cash and cash equivalents as of the end of December, has sufficient financial strength to increase its offering.
Both deals would reshape Hollywood’s power structure, handing the suitor one of the industry’s most coveted studios and an extensive content library, as well as lucrative entertainment franchises like Game of Thrones and DC Comics.
Paramount has argued that the path to US regulatory approval is clearer than Netflix’s and has said it would be prepared to challenge the board at this year’s annual meeting if Warner Bros. rejects the new offer.
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