LOS ANGELES (CNS) – The board of Warner Bros. Discovery announced Thursday that a revised offer from Paramount Skydance constitutes a “superior proposal” to its existing merger agreement with Netflix, which subsequently declined to amend its bid.
Last week, the WBD Board of Directors gave Paramount until Feb. 23 to submit its “best and final proposal,” while making clear that the board continued to favor the Netflix $82.7 billion, all-cash proposal.
But in a statement Thursday, the company said, “WBD has notified Netflix of its determination that the PSKY proposal constitutes a `Company Superior Proposal.’ Under the terms of the Netflix merger agreement, this notice triggers a four business day period during which Netflix has the right to propose revisions to the Netflix merger agreement so that the PSKY proposal would cease to constitute a `Company Superior Proposal.”‘
The statement added, “Following the conclusion of this period, if the Board determines in good faith, after consultation with its independent financial and legal advisers, that, after considering any revisions to the terms of the Netflix merger agreement proposed by Netflix, the PSKY proposal continues to constitute a `Company Superior Proposal,’ WBD would be entitled to terminate the Netflix merger agreement.”
Netflix said in a statement Thursday it would not match Paramount Skydance’s latest offer.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid,” the company said.
Netflix added the “transaction was always a `nice to have’ at the right price, not a `must have’ at any price.”
Netflix and Paramount have jockeyed for months over the sale of Warner Bros. Discovery’s studios and HBO Max streaming business in a deal closely watched throughout the entertainment industry.
Netflix’s offer was to purchase WBD but not all of its cable channels, while PSKY wants to buy the whole company. Warner is planning to spin off its cable channels into a separate company.
Paramount Chairman and CEO David Ellison said in a statement Thursday, “We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing.”
Paramount’s latest proposal values the deal at $31 per share and includes several additional incentives. Those include a “ticking fee” of 25 cents per share per quarter beginning after Sept. 30, 2026, and a $7 billion reverse termination fee if the transaction fails to close due to regulatory issues, according to The Hollywood Reporter.
The announcement from Warner Bros. Discovery came hours after Netflix co-CEO Ted Sarandos met with White House officials in Washington, D.C., to discuss the proposed deal. Details of the meeting were not disclosed.
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