Warner Bros board says revised Paramount bid could lead to superior proposal over Netflix
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More news: Warner Bros has announced that its board has determined that the revised acquisition proposal from Paramount Skydance Corporation “could reasonably be expected to lead to a ‘Company Superior Proposal’” over its merger agreement with Netflix.
The board has not yet determined if it is a ‘company superior proposal’, but in the event that it does, Netflix will have four days to respond.
Paramount’s increased proposed purchase price is worth USD31 per Warner share in cash, plus a daily ticking fee equal to 25 US cents per quarter from 30 September 2026.
A USD7 billion regulatory termination fee payable by Paramount in the event the transaction does not close due to regulatory matters while a USD2.8 billion termination fee would be payable by Paramount to end the existing Netflix Merger Agreement.
The proposal also includes an obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by Paramount’s lending banks and ‘company material adverse effect’ definition excluding the performance of Warner’s Global Linear Network business.
Warner’s financial advisers are Allen & Company, JP Morgan and Evercore while its legal advisers are Wachtell Lipton, Rosen & Katz and Debevoise & Plimpton LLP.
Warner Bros receives revised bid from Paramount
The news: Warner Bros Discovery said it has received a revised offer from Paramount Skydance to buy out the entire company, without disclosing details of the updated offer.
The context: In a statement released Tuesday, Warner Bros said that it received the updated offer from Paramount during the seven-day waiver period and is currently reviewing the proposal.
On Monday, Bloomberg reported that the offer was higher than the USD30 ($42.67) per share previously put forward by Paramount.
According to the terms of the merger agreement, should Warner Bros deem the revised Paramount offer superior to the agreement it has already reached with Netflix, the streaming giant will have four days to make a counteroffer.
Warner Bros added that the board continues to recommend in favour of the Netflix transaction and that Warner Bros shareholders should not tender their shares to Paramount.
Warner Bros is expected to reveal Paramount’s new offer to shareholders in the coming days, with both companies due to report earnings later this week.
Last week, Warner Bros granted Paramount one week to submit its “best and final offer”, 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”.
The sources: Warner Bros Discovery, Warner Bros Discovery, WSJ, Bloomberg
