Warner Bros. Discovery is reopening discussions with Paramount, owned by Skydance, to consider their final proposal, while affirming its commitment to the Netflix studio and streaming agreement. The company, recognized for its ownership of HBO Max and popular franchises like “Harry Potter” and DC superheroes, disclosed in a regulatory filing that Netflix granted them a seven-day window to engage with Paramount to address outstanding concerns and clarify terms in Paramount’s latest offer.
Despite having previously turned down offers from Paramount, including a hostile bid in December, Warner emphasized that the resumption of talks does not indicate a change in their stance. In a letter to Paramount’s board, Warner Bros. chairman Samuel DiPiazza Jr. and CEO David Zaslav reiterated their confidence in the Netflix merger, stating that they have not found Paramount’s proposal to be superior.
The deal with Netflix, valued at $72 billion, involves the acquisition of Warner’s studio and streaming divisions, including HBO Max, in an all-cash transaction. The total enterprise value amounts to about $83 billion, or $27.75 per share, pending the completion of Warner’s cable operations separation.
Paramount, which previously felt ignored by Warner during their six previous offers, expressed readiness to engage in productive discussions following Warner’s decision to consider their proposal. Netflix, on the other hand, stood by its offer, citing it as providing better value and certainty for Warner Bros. Discovery shareholders.
Paramount, in its bid to acquire Warner entirely, made a $77.9-billion all-cash offer in December, with an enterprise value of $108 billion including debt, or $30 per share. Warner confirmed that Paramount indicated a willingness to increase their offer to $31 per share pending discussions.
Both companies are vying for control of Warner’s vast film and television library, featuring classics like “Casablanca” and “Citizen Kane,” along with popular HBO shows like “Game of Thrones.” Regulatory approvals will be necessary for any sale, as it could potentially reshape the entertainment industry landscape.
Warner Bros. has a forthcoming special meeting for shareholders to vote on the Netflix merger, scheduled for March 20. The news of the renewed discussions led to a positive market response, with Warner’s stock rising over two percent, Paramount Skydance’s shares climbing nearly three percent, and Netflix’s stock experiencing a slight increase.