WBD board says new Paramount offer may be better deal than Netflix
WBD board says new Paramount offer may be better deal than Netflix
The new bid sent by Paramount to WBD improves over the old in several facets, but it’s still not guaranteed that it will be accepted.
While walking the red carpet for the BAFTAs over the weekend, Netflix co-CEO Ted Sarandos had blunt advice for Paramount Skydance as it continued its hostile takeover attempts of Warner Bros. Discovery: “Don’t make up stories, don’t [spread] misinformation about market share. Just put a better deal on the table and see if you can win.” Now, it appears that Paramount may have done just that, as the WBD board has informed its shareholders that the newly received offer from the David Ellison-led company may lead to a better overall deal than Netflix’s previously accepted bid.
Key Details:
- Time to pivot?:The new $31-per-share offer from Paramount has WBD board members mulling a switch from Netflix.
- Multiple improvements: In addition to the raised share price, Paramount has packed other incentives into its new offer.
- Your turn: Netflix will get a chance to respond if a pivot to Paramount becomes official.
WBD’s board now says that Paramount's new offer to purchase all of its assets could become a “Company Superior Proposal,” a deal that could provide better value than the existing $82.7 billion tender Netflix made to buy the WBD studio and streaming businesses.
The improved bid features a higher purchase price of $31 per share, plus the so-called ticking fee that was shoehorned into Paramount's previous offer a couple of weeks ago. It also includes a $7 billion regulatory termination fee, a $2.8 billion termination fee that WBD would owe Netflix if it backed out of its deal with that company, and other assurances to WBD shareholders.
To be clear, the WBD board has not declared that Paramount’s offer is better than Netflix’s as of now; it has simply said that it could be. This declaration allows WBD to continue engaging with Paramount past the seven-day window that was granted when Netflix gave WBD a waiver to reopen talks.
If the WBD board does declare Paramount’s new offer superior, Netflix would have four days to put a revised bid of its own on the table.
“There can be no assurance that the Board will conclude that the transaction proposed by PSKY is superior to the merger with Netflix or that any definitive agreement or transaction will result from WBD’s discussions with PSKY,” a WBD press release said.
For its part, Paramount said in its own statement that it “looks forward to continuing to engage constructively” with WBD over the transaction. For now, all analysts and executives from Paramount and Netflix can do is wait for the WBD board to conduct a closer examination of both deals. But it certainly appears that Netflix is now on the defensive and will have to up its own offer to ensure it doesn’t lose WBD to Paramount.
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