Warner Bros Discovery has declined Paramount Skydance’s (PSKY) recent $30-per-share takeover offer but has granted the Hollywood studio seven days to propose a more favourable deal to acquire the owner of HBO Max and the “Harry Potter” franchise, the company said on Tuesday, 17 February.
Paramount also separately suggested a higher share price of $31, Warner Bros said, adding that the bidder has until 23 February to submit its final offer.
“Following receipt of PSKY’s latest amended offer, a senior representative for PSKY informed a WBD Board member that, if the WBD Board authorised discussions, PSKY would agree to pay $31 per share and that the offer was not PSKY’s “best and final” proposal,” Warner Bros said.
Commitment to Netflix
Warner Bros Chairman Samuel DiPiazza Jr. and CEO David Zaslav said, “Our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger. We continue to recommend and remain fully committed to our transaction with Netflix.”
The two media giants have been competing for control of Warner Bros, its flagship film and TV studios, and extensive content library, in a battle that underscores the high stakes in the entertainment industry.
An unnamed Paramount financial advisor said that their offer would increase to $31 per share if Warner Bros agreed to open negotiations, and they might raise it further, according to a Reuters report. Warner Bros. mentioned in their letter that they now expect a best-and-final proposal to exceed that amount.
What is the current bid?
Paramount’s current bid for the entire company is $108.4 billion, whereas Netflix is offering $82.7 billion specifically for its studio and streaming units. Warner Bros, which has consistently declined Paramount’s proposals to acquire the whole firm, is proceeding with a vote on Netflix’s $ 27.75-per-share offer for its studio and streaming divisions, the report said.
Shareholders to vote on 20 March
Shareholders will vote on 20 March regarding the Netflix merger, which would occur after Warner Bros spins off its Discovery Global cable operations, including CNN, TLC, Food Network, and HGTV, into a separate, publicly traded company.
“Warner Bros. Discovery, Inc. today announced that it will hold the Special Meeting of Shareholders to vote on the merger with Netflix, Inc. on 20 March 2026, at 8:00 AM Eastern Time,” the company said.
Warner Bros estimates that Discovery Global could be valued between $1.33 and $6.86 per share. The studio’s choice to work with Paramount required a special waiver from Netflix. According to its merger agreement, Warner Bros can engage with a rival bidder only if the board considers the offer to be potentially superior, triggering a legal loophole that permits limited negotiations despite restrictions on discussions.
Paramount’s offer
Paramount had previously said that the board “never meaningfully engaged” with them regarding six different offers made over the 12 weeks prior to Warner Bros’ announced merger with Netflix on 5 December.
The company’s public bid, launched days later, was rejected later that month. Their revised offer, which included a personal guarantee of $40 billion in equity from Oracle founder Larry Ellison, father of Paramount CEO David Ellison, was also turned down in early January.
Paramount was also reportedly pushing to add directors to Warner Bros’ board and is considering Pentwater Capital Management CEO Matt Halbower as a potential nominee, he said last week, the report said. Pentwater, which holds approximately 50 million Warner Bros. shares, has supported Paramount’s proposal.
“Every substantive complaint that the Warner Bros board had with Paramount’s previous offer has been addressed,” Halbower was quoted as saying in an interview last week.
Our transaction provides superior value, says Netflix
Netflix announced that the deal has hit a milestone, and Warner Bros shareholders are scheduled to vote on the merger next month.
“While we are confident that our transaction provides superior value and certainty, we recognise the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY’s antics,” Netflix said.
Last week, Paramount tried again to attract Warner Bros shareholders by improving its previous bid without increasing the total offer of $30 per share. Instead, Paramount proposed giving WBD’s shareholders additional cash for each quarter the deal remains unclosed after this year and agreed to pay the $2.8 billion breakup fee that HBO would owe Netflix if it pulls out.
Warner Bros said that the revised merger agreement with Paramount still does not meet the criteria for a superior proposal as determined by its board, the report said.
Ancora, which has a stake worth nearly $200 million, stated last week that Warner Bros’ board failed to properly engage in discussions with Paramount Skydance regarding a competing offer for the entire company, including cable assets such as CNN and TNT, the report said.
