Warner Bros. Discovery (WBD) confirmed Tuesday that Paramount Skydance has increased its bid to acquire the entertainment conglomerate, offering $31 per share – a move that could potentially surpass Netflix’s existing agreement with WBD. The revised offer, which includes a $7 billion reverse termination fee and reimbursement for costs associated with cancelling its deal with Netflix, has prompted WBD’s board to evaluate whether Paramount Skydance’s proposal is “superior” to Netflix’s.
The increased bid from Paramount Skydance, which includes CBS and Paramount Pictures, comes after a week-long extension granted by the WBD board with Netflix’s consent. WBD stated that the offer “could reasonably be expected to lead to a company superior proposal,” according to a company release. Netflix now has four business days to submit a counter-offer or relinquish its claim to a portion of WBD.
Netflix currently has an agreement to acquire WBD’s studio and streaming business for $83 billion. However, Paramount Skydance is seeking to acquire the entirety of WBD, encompassing its cable networks, including CNN and HBO, in a deal valued at roughly $77 billion based on the $31 per share offer. The competition between the two media giants centers on differing visions for the future of the company.
Paramount Skydance’s pursuit of WBD has escalated in recent weeks, including direct appeals to WBD shareholders and legal action aimed at compelling the release of financial data. The bidder has also threatened to nominate directors to WBD’s board at its annual meeting in an attempt to gain approval for the takeover. The company, led by the son of billionaire Larry Ellison, has vowed to “engage constructively” with WBD’s board following the announcement of the revised bid.
A merger between WBD and either Paramount Skydance or Netflix would represent a significant consolidation in the media landscape, with potential ramifications for television, film production, and the cinema industry. Netflix’s increasing dominance in streaming has raised concerns about the future of theatrical releases, potentially leading to shorter or limited cinema runs for films. A Paramount Skydance acquisition of WBD would consolidate news ownership, bringing CNN under the same umbrella as CBS News, raising questions about media concentration.
WBD’s board has not yet made a final determination on which offer is preferable, and continues to recommend the Netflix transaction. The board will “engage further” with Paramount Skydance to assess whether a truly superior proposal can be reached. Netflix declined to comment on the latest developments.
