Warner Bros grants Paramount one week to make best and final offer
Make us a preferred source
Make us a preferred source on Google
The news: Warner Brothers Discovery has granted Paramount Skydance one week to submit its “best and final offer”, reopening talks with the media company and potentially setting the stage for a second bidding war with Netflix.
The context: While Warner Bros has a pending transaction with Netflix for its streaming and audio business, Paramount launched a hostile tender offer to Warner Bros shareholders at USD30 ($42.54) per share. Paramount last week sweetened the proposal to also pay the USD2.8 billion termination fee that Warner Bros will have to pay to Netflix should it walk away from its agreement.
Warner Bros on Tuesday said it has negotiated a waiver with Netflix allowing it to reopen talks with Paramount for seven days, until 23 February. The decision to negotiate was made after a Paramount representative told a member of the Warner Bros board that Paramount would increase its offer to at least USD31 per share should the company reopen talks and that the offer was not its “best and final”.
Warner Bros says that it has asked Paramount for its final offer, as it attempts to force Paramount to either improve the proposal or abandon its pursuit.
Warner Bros said that the board still recommends shareholders vote in favour of its agreement to sell its studios and HBO Max streaming service to Netflix when the board meets on 20 March.
In a statement shared Tuesday by Netflix, the streaming service said the shareholder meeting date marks an “important milestone for our transaction with WBD” and while it granted Paramount a “narrow seven-day waiver”, it does not change the fact “that we have the only signed, board-recommended agreement with WBD, and ours is the only certain path to delivering value to WBD's stockholders.”
What they said: President and CEO of Warner Bros David Zaslav said: “Every step of the way, we have provided PSKY [Paramount] 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.”
The sources: Warner Bros, Netflix, FT, Bloomberg
