Warner Bros Discovery (WBD) has said it is reviewing a sweetened takeover bid from Paramount Skydance but did not reveal details of what its board had asked to be Paramount’s “best and final offer” to attempt to derail Netflix.
Last week, WBD, which has so far stuck to its binding agreement with Netflix, had given Paramount seven days to table its final offer to best the $82.7bn deal with the streaming company.
Paramount, which is pursuing a hostile $108.4bn (£76.8bn) takeover directly with WBD shareholders, has now sweetened its previous $30-a-share offer.
The offer for the entirety of Warner Bros Discovery includes covering a $2.8bn fee owed to Netflix if WBD pulled out of their agreement; Paramount is also offering to backstop a multibillion-dollar refinancing to eliminate $1.5bn in costs.
It has also added a “ticking fee”, amounting to about $650m in cash each quarter if the deal is not closed by the end of the year.
The board of WBD said on Monday: “Following engagement with Paramount Skydance during the seven-day limited waiver period, we received a revised proposal to acquire WBD. We are reviewing [it] in consultation with our financial and legal advisers. We will update our shareholders following the board’s review.”
The company added that the “Netflix merger agreement remains in effect, and the board continues to recommend in favour of the Netflix transaction. WBD shareholders are advised not to take any action at this time with respect to the amended PSKY tender offer.”
If WBD deems the new Paramount offer superior, Netflix will have four days to improve its previously agreed bid. Netflix agreed to acquire WBD’s studio and streaming assets for $27.75 a share in December. The current market capitalisation is $71.72bn, with shares trading at $28.92 on Tuesday.
Under the $82.7bn Netflix deal, the streaming company is poised to take control of WBD’s prized assets, including Warner Bros, the studio behind franchises including Harry Potter, Superman and Batman, as well as HBO, home to shows including Game of Thrones, The White Lotus and Succession.
WBD’s global networks operation – which includes CNN, the Cartoon Network and the Discovery Channel – is not part of the Netflix deal and is to be spun off as a separate company in which WBD investors will receive shares.
The battle for Warner’s assets has become political. On Saturday, Donald Trump told Netflix to remove the Democratic foreign policy expert Susan Rice from its board or “face the consequences”.
On Monday, Ted Sarandos, Netflix’s chief executive, responded to the US president, telling BBC Radio 4 that Trump “likes to do a lot of things on social media. This is a business deal. It’s not a political deal. This deal is run by the Department of Justice in the US and regulators throughout Europe and around the world.”
Two days earlier, in an interview with Variety, Sarandos declined to say how Netflix would respond to a higher offer from Paramount. But he did say that Netflix had a “rich history” of being “willing to walk away and let someone else overpay for things”.
“The next move is up to somebody else. We have a signed deal with Warner Bros Discovery,” Sarandos said. “If someone wants to make a better deal, which the Warner Bros Discovery board has said has not happened yet, then we’ll see what happens down the road.”
