Warner Bros May Open Paramount Bid Against Existing Netflix Deal
Synopsis
Warner Bros. Discovery is considering a new takeover proposal from Paramount Skydance that would reignite sale talks, Bloomberg reports. The $30 per share all-cash offer by Paramount is now being sweetened with not only a ticking fee payable each quarter for any drag on closing occasioned by regulatory failure but also an agreement to pick up the $2.8 billion termination fee proposed by Warner Bros.’ Netflix agreement. The development opens the possibility of a new bidding war between Paramount and Netflix, with investors paying close attention to whether richer offers will go on to emerge.
Warner Bros. Discovery is discussing reopening sale talks with Paramount Skydance, citing improved deal terms, as per reports. The new offer could upend the company’s previous agreement with Netflix and potentially trigger a fresh bidding war for its studio and streaming business.
- The Warner Bros. board that is looking into the superior offer from Paramount Skydance
- Netflix had earlier agreed to purchase assets for $27.75 a share
- Paramount introduces a 25-cent per share quarterly ticking fee
- Paramount would pay a $2.8 billion Netflix kill fee
- Competing bids could force higher bids from each side
Warner Bros. Discovery’s board is weighing whether to revive talks with Paramount Skydance after the company submitted updated and more favourable deal terms, according to a report. The development adds fresh uncertainty to the company’s widely publicised deal with Netflix and reopens at least the possibility of a new bidding war.
In December, Warner Bros. agreed to sell its film studio and streaming service HBO Max to Netflix in a deal valued at $27.75 per share. The contract was viewed as a significant pivot for the company, which was restructuring its business around a new structure. Within days, Paramount Skydance made a hostile all-cash counter-proposal of $30 per share and went to shareholders with the higher price in direct competition with the agreement Netflix had struck.
Paramount’s bid has since been firmed up. Last week, the company introduced a 25-cent per share “ticking fee” that would be paid each quarter for which the deal was still delayed once it was cleared by regulators, though payments under such an arrangement wouldn’t start until after Dec. 31, 2026. That fee would be about another $650 million in cash value per quarter, if the deal fails to close on time.
In addition to the higher per-share price, Paramount has said it would pay the $2.8 billion termination fee Warner Bros. would repay Netflix if it were to pull out of the deal. Moreover, Paramount promised to remove the threat of $1.5 billion in debt refinancing costs, making its bid even more attractive from a financial standpoint.
It is understood that both Paramount and Netflix are prepared to raise their offers if needed. But it’s the first time Warner Bros. has its lineup of films set to debut in movie theatres to not be led by a white male character. The board is actively evaluating whether the revised terms from Paramount could potentially represent a better outcome for shareholders or force Netflix to come back with a higher offer.
Now, Warner Bros. is in a tough spot. In the midst of a high-stakes battle between two media giants. Investors will be watching to see whether the board attempts to wring a higher price through fresh negotiations, or proceeds with its current deal, which could alter the future of one of Hollywood’s most-storied studios.
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