Warner Bros. Discovery has decided to resume discussions with Paramount, owned by Skydance, to review their “best and final” proposal, as the company remains committed to its agreement with Netflix. The decision comes after Warner Bros. Discovery received approval from Netflix to engage in talks with Paramount for the next seven days, or until Monday, to address any outstanding issues and clarify certain terms in Paramount’s latest bid. Despite previously rejecting Paramount’s offers, the company reiterated its support for the Netflix merger and emphasized that the board has not concluded that Paramount’s proposal is superior. Warner Bros. chairman Samuel DiPiazza Jr. and CEO David Zaslav underlined their full commitment to the Netflix deal in a letter to the Paramount board.
In December, Netflix agreed to acquire Warner Bros.’ studio and streaming business for $72 billion in an all-cash transaction, covering legacy TV and movie production arms along with HBO Max. The total enterprise value of the deal, including debt, amounts to about $83 billion, or $27.75 per share.
Paramount has expressed its willingness to engage in constructive discussions despite Warner Bros.’ unusual actions, criticizing the timed deadline for evaluating the offer. Paramount has maintained its tender offer of $30 per share, higher than Netflix’s proposal, and plans to pursue a proxy fight. Paramount also disclosed its intention to increase its offer to $31 per share pending engagement. Unlike Netflix, Paramount aims to acquire Warner’s entire company, including networks like CNN and Discovery, with an offer of $77.9 billion in cash made in December. The enterprise value of Paramount’s bid, including debt, stands at $108 billion, or $30 per share.
The potential acquisition of Warner’s vast film and television library by either Netflix or Paramount, which includes iconic titles like “Casablanca” and “Citizen Kane” and popular HBO shows like “Game of Thrones,” has raised industry concerns. The sale will undergo regulatory scrutiny, and a special meeting is scheduled for Friday, with shareholders set to vote on the Netflix merger on March 20. Warner Bros.’ stock saw a more than two percent increase, while Paramount Skydance and Netflix also experienced slight stock rises.
