Paramount submits higher offer for Warner Bros
Paramount Skydance has stepped up efforts to derail the HBO Max owner’s deal with Netflix by submitting a higher bid for Warner Bros. Discovery, a source familiar with the matter told Reuters.
A bidding war for one of Hollywood’s most coveted assets, including Harry Potter and the Game of Thrones series, has boosted its chances of dominating the streaming-focused market.
Warner Bros’ chosen suitor Netflix, which has offered to buy the studios and streaming assets for $US27.75 ($39.32) in cash per share or $US82.7 billion ($117.2 billion), has been allowed to match the latest bid from David Ellison-led Paramount.
Netflix has enough cash and could increase its bid for owner HBO Max, while Paramount’s rival bid is backed by Oracle billionaire Larry Ellison.
Paramount’s initial offer for the entire company was US$108.4 billion ($A153.6 billion), or US$30 ($A43) per share.
Warner Bros has been asked to submit its “best and final offer” after rejecting an improved offer that would have included paying Netflix a US$2.8bn ($A4bn) termination fee and adding a quarterly “marking fee” of 25c per share from next year to compensate Warner Bros shareholders for any delay in completing the deal.
Warner Bros. said Paramount’s offer on February 10 still fell short of what the board would consider a superior offer and set a seven-day deadline, until February 23, to submit a revised offer.
MoffettNathanson analysts had previously said an offer from Paramount in the range of US$34 ($A48) per share would end the bidding war and “avoid further debate over the value of Discovery Global”.
Discovery Global could earn between US$1.33 ($A1.88) and US$6.86 ($A9.72) per share, according to Warner Bros’ estimates.
Netflix says its offer is from Warner Bros. He said that it brought added value to its shareholders thanks to the Discovery Global spin-off. WBD argues that this will add value to the new company by providing greater strategic, operational and financial flexibility.
But Paramount said cable, which is at the center of the streaming giant’s bid, is essentially worthless.
Warner Bros., led by David Zaslav, has come under pressure from Ancora Capital after the activist investor bought nearly US$200 million ($283 million) in shares from the owner of HBO and accused the company of failing to adequately engage with Paramount.
The investor warned that if Warner Bros. refused to re-enter talks with Paramount, he would vote against the Netflix deal and hold the company’s board accountable at its annual meeting.
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