Warner Bros. Discovery is reopening discussions with Paramount, owned by Skydance, to consider their “best and final” offer, while continuing to support the studio and streaming agreement with Netflix. Warner Bros. Discovery, known for its ownership of HBO Max and popular franchises like the Harry Potter series and DC superheroes, disclosed in a recent regulatory filing that Netflix granted a waiver to engage in talks with Paramount for a week. This move aims to address unresolved issues and clarify terms in Paramount’s latest proposal, with Netflix having the option to match any offer.
Despite having previously turned down Paramount’s bids, including a hostile bid in December, Warner remains steadfast in its commitment to the Netflix merger. In a letter to Paramount, Warner Bros. chairman Samuel DiPiazza Jr. and CEO David Zaslav emphasized that the board has not found Paramount’s proposal superior to the Netflix deal. The deal between Netflix and Warner Bros. involves Netflix acquiring Warner’s studio and streaming business for $72 billion in an all-cash transaction, encompassing legacy TV and movie production arms along with HBO Max.
The decision to resume discussions with Paramount signals a shift for Warner Bros., which had faced criticism from Paramount for not engaging meaningfully in previous offers. Netflix, on the other hand, expressed confidence in its existing agreement with Warner Bros., stating its belief in providing superior value and certainty. Meanwhile, Paramount deemed Warner’s actions as “unusual” but expressed willingness to engage in constructive discussions.
Paramount maintains its tender offer at $30 per share, positioned as a better alternative to Netflix’s proposal, and intends to pursue a proxy fight. In contrast to Netflix’s interest in the studio and streaming business, Paramount aims to acquire the entirety of Warner, including networks like CNN and Discovery, with an offer of $77.9 billion in all cash, which may increase to $31 per share pending further engagement.
Both companies have been vying for ownership of Warner’s extensive library of films and TV shows, featuring classics like Casablanca and Citizen Kane, as well as popular HBO programs like Game of Thrones. As shareholders prepare to vote on the Netflix merger on March 20, Warner Bros. has a special meeting scheduled for Friday. The potential sale of Warner Bros. has raised industry concerns, with regulatory scrutiny expected for any finalized deal. Warner’s stock saw a rise of over two percent, while Paramount Skydance and Netflix also experienced positive market movements.