Netflix has been given four days to beat a sweetened offer by Paramount Skydance for the assets of Warner Bros Discovery in the latest twist in the battle for control of the media giant.
In an announcement on Thursday afternoon, WBD said that its board had determined Paramount’s revised offer to be a “company superior proposal” compared with Netflix’s $82.7bn deal – triggering Netflix’s window to respond.
In its revised offer, Paramount offered $31 per share for the company, up from $30, a $7bn regulatory termination fee if the merger is not improved, and a “ticking fee” amounting to about $650m in cash each quarter beginning after September.
“WBD has notified Netflix of its determination that the PSKY proposal constitutes a ‘company superior proposal’,” the company said. “Under the terms of the Netflix merger agreement, this notice triggers a four-business-day period during which Netflix has the right to propose revisions to the Netflix merger agreement so that the PSKY proposal would cease to constitute a ‘company superior proposal’.
“Following the conclusion of this period, if the board determines in good faith, after consultation with its independent financial and legal advisors, that, after considering any revisions to the terms of the Netflix merger agreement proposed by Netflix, the PSKY proposal continues to constitute a ‘company superior proposal’, WBD would be entitled to terminate the Netflix merger agreement.”
Still, WBD said that its board of directors “continues to recommend in favor of the Netflix transaction and has not withdrawn or modified its recommendation”.
In a statement, Paramount Skydance’s chief executive, David Ellison, said: “We are pleased WBD’s board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing.”
WBD has announced a 20 March special meeting for shareholders to vote on the Netflix merger, though it is unclear how Thursday’s announcement might affect that.
The announcement from WBD’s board comes on the same day that Netflix’s co-chief executive Ted Sarandos held meetings in Washington with Trump administration officials.
Netflix’s acquisition of the streaming and studio assets of WBD is expected to receive close regulatory scrutiny, including a thorough review by the Department of Justice to determine if it poses a threat to competition in the entertainment industry.
In a US Senate subcommittee meeting earlier this month, Sarandos defended the deal and said that, based on his conversations, Donald Trump “has been nothing but interested in protecting and creating American jobs”.
