Warner Bros Discovery (WBD) is set to reopen negotiations with Paramount Skydance Corporation (PSKY), setting up another bidding war between Paramount and streaming giant, Netflix.
Netflix’s $83 billion (A$117 billion) bid was accepted by Warner Bros. back in December and has received intense scrutiny from the US Department Of Justice, outlining the main concerns as impact on workforce, impact on consumer choice and cost. Paramount had previously sweetened its all-cash deal as it aims to take over Warner Bros’ entire network for $77.9 billion (A$110 billion).
A senior representative for Paramount has informed the Warner Bros board that if WBD is willing to engage in final negotiations, Paramount would agree to pay US$31 (A$43.75) per share, more than its previous US$30 (A$42.3) per share offer. WBD remains firm that Paramount must bid over $31 per share for the media company to entertain Paramount’s “hostile” bid.
The Board of Directors at Warner Bros. has unambiguously recommended shareholders reject Paramount’s final offer and remain in favour of Netflix.
WBD has sent a letter to Paramount outlining all their main concerns in Paramount’s most recent offer that must be corrected in order for WBD to move forward with their negotiations.
It said: “The WBD Board continues to unanimously recommend that our shareholders approve the Netflix transaction.” and that Paramount’s most recent bid still contains many “unfavourable terms and conditions”.
David Zaslac president and chief executive officer of Warner Bros. Discovery said: “Every step of the way, we have provided PSKY with clear direction on the deficiencies in their offers and opportunities to address them. We are engaging with PSKY now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer”.
PSKY has not yet submitted a formal best and final offer but is expected to within the next seven days.
