WBD ‘considering reopening’ acquisition talks with Paramount – Bloomberg
Warner Bros Discovery (WBD) is reportedly considering reopening sale talks with Paramount Skydance after receiving its amended offer, potentially igniting a second bidding war with Netflix, according to Bloomberg.
The US outlet broke the news late on Sunday that WBD is potentially softening its stance towards Paramount Skydance, citing sources with knowledge of the matter.
The WBD board is discussing whether Paramount could offer a path to a superior deal, which may ignite a second bidding war with Netflix, and is set to clarify its position this week.
Both Netflix and Paramount have indicated they would be willing to raise their bids to secure a transformative deal for WBD, which is set to change the shape of Hollywood regardless of the winning bidder.
Last week, David Ellison’s Paramount once again sweetened its hostile takeover bid for WBD. Under the updated offer, Paramount has added a 25¢-per-share quarterly increase to its US$30 offer if the deal doesn’t close by December 31, 2026.
It also promised to fund Netflix’s US$2.8bn termination fee, should the deal between the streaming giant and WBD, agreed late last year and which remains binding, not come to fruition.
Paramount said the “enhanced” offer – which does not raise the overall offer price – underscores its “confidence in the speed and certainty of regulatory approval for its transaction.” The company also said it had complied with the Department of Justice’s second request for information related to Paramount’s tender offer.
Last month, the company extended the deadline for WBD stockholders to tender their shares until February 20. This came after Netflix updated its bid for WBD to an all-cash offer of US$27.75 per share, valuing the company at US$82.7bn.
Meanwhile, WBD has faced pressure from shareholders to at least engage with Paramount, with Ancora Holdings Group, a private equity firm with a US$200m stake in WBD, went public with its opposition to the Netflix deal.
If talks between WBD and Paramount do re-open and the latter saw its new offer accepted, Netflix would have the right to match it.
The race to acquire WBD is being waged in both the US and Europe, with Ellison this month sending an open letter to the UK creative community in which he called the WBD/Netflix tie-up “monopolistic” and claiming Paramount’s offer provides greater choice and more meaningful competition.
In December, Paramount claimed Netflix’s takeover bid represented a “blatant attempt to eliminate” an international streaming competitor in HBO Max. For its part, Netflix has indicated that it plans to keep HBO Max as a separate entity.
Prior to its reported change of heart, WBD has repeatedly said that Paramount’s offer is not better than Netflix’s. It has also gone several steps further, stating it sees red flags in Paramount’s financing plan.
It has also pointed to Paramount’s “junk” credit rating, versus Netflix’s “investment-grade balance sheet” and US$400bn market cap as a rationale for its decision.
Netflix, meanwhile, has been busy making the case for the takeover to the US government, with co-CEO Ted Sarandos this month telling a senate committee that its acquisition would “strengthen” the US entertainment business and the combined entity would not constitute a monopoly.
