1 of 3 | Warner Bros. Discovery CEO David Zaslav said the company will engage with Paramount Skydance on its offer to buy the company, but still believes Netflix is a better choice. Photo by John Angelillo/UPI | License Photo
Warner Bros. Discovery announced that Netflix has granted it a limited 7-day waiver to allow WBD to talk with Paramount Skydance about its amended offer.
The waiver ends Feb. 23 and is designed to allow Warner Bros. stockholders to gain clarity on their options and to allow Paramount to make its best and final offer, a press release from WBD said. Netflix still retains its matching rights according to the merger agreement.
The WBD board said it continues to unanimously recommend the Netflix merger and urges shareholders to reject the Paramount offer.
The ongoing saga of the Warner Bros. sale has been going on since October, when the company said it was open to offers. On Dec. 5, after a bidding war between Netflix and Paramount, WBD accepted Netflix’s bid. Soon after, Paramount launched a hostile bid to buy WBD, but the board didn’t budge. Then Paramount announced that Oracle creator Larry Ellison would back the deal with $40 billion in equity. On Jan. 20, Netflix changed its offer to all cash, then on Feb. 10, Paramount did the same and added some extras to address some of WBD’s concerns.
The extras included paying the $2.8 billion termination fee that WBD would owe Netflix and an agreement to back WBD’s debt costs. It said it would pay a ticking fee of 25 cents per share for each quarter the deal is delayed, starting in 2027, giving WBD shareholders about $650 million in cash per quarter. But it didn’t raise the $30-per-share bid.
Paramount and Netflix have both said they would be willing to raise their bids, Bloomberg reported. But this is the first time that WBD has considered Paramount’s hostile offer.
“Following receipt of PSKY’s [Paramount’s] latest amended offer, a senior representative for PSKY informed a WBD Board member that, if the WBD Board authorized discussions, PSKY would agree to pay $31 per share and that the offer was not PSKY’s ‘best and final’ proposal,” WBD’s press release said.
But that number isn’t official yet, it said.
“To provide specific clarity in this regard, WBD has today sent PSKY a letter … setting out the key issues yet to be addressed by PSKY, along with drafts of full transaction agreements for PSKY to confirm the terms of its offer,” the release said.
Warner Bros. also announced it will have a special meeting of shareholders on March 20 to vote on the merger.
Netflix said it wanted to allow WBD to get past the “distraction” of Paramount.
“While we are confident that our transaction provides superior value and certainty, we recognize the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY’s antics,” Netflix said in a statement. “Accordingly, we granted WBD a narrow seven-day waiver of certain obligations under our merger agreement to allow them to engage with PSKY to fully and finally resolve this matter.”
WBD President and CEO David Zaslav said the goal is to “maximize value and certainty” for shareholders.
“Every step of the way, we have provided PSKY with clear direction on the deficiencies in their offers and opportunities to address them. We are engaging with PSKY now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer,” Zaslav said.
This week in Washington
President Donald Trump speaks alongside Administrator of the Environmental Protection Agency Lee Zeldin in the Roosevelt Room of the White House on Thursday. The Trump administration has announced the finalization of rules that revoke the EPA’s ability to regulate climate pollution by ending the endangerment finding that determined six greenhouse gases could be categorized as dangerous to human health. Photo by Will Oliver/UPI | License Photo
