Paramount Skydance says it’s “prepared to engage in good faith and constructive discussions” after Warner Bros. Discovery reopened negotiations around its $30 per share takeover bid and gave the company until Feb. 23 to provide a “best and final” offer.
However, Paramount said it would continue to advance its $108.4 billion tender offer, maintain its proxy solicitation in opposition to Netflix’s $83 billion deal and proceed with its efforts to nominate a slate of directors at WBD’s upcoming annual meeting.
“The WBD Board has chosen to avoid making the customary determination under the Netflix merger agreement that Paramount’s superior $30 per share all-cash offer “could reasonably be expected to result in” a superior proposal, which would have given it an unfettered right to negotiate without a time deadline,” Paramount said in a statement. “Although the Board’s actions are unusual, Paramount is nonetheless prepared to engage in good faith and constructive discussions.”
During the seven-day period, Paramount and Warner’s board will discuss the unresolved deficiencies and clarify certain terms in the former’s latest amended $30 per share offer. However, WBD continues to recommend Netflix’s 83 billion deal and is urging shareholders to vote against the Paramount offer.
“We continue to believe the Netflix merger is in the best interests of WBD shareholders due to the tremendous value it provides, our clear path to achieve regulatory approval and the transaction’s protections for shareholders against downside risk,” WBD board chairman Samuel Di Piazza Jr. said. “With Netflix, we will create a brighter future for the entertainment industry – providing consumers with more choice, creating and protecting jobs and expanding U.S. production capacity while increasing investments to drive the long-term growth of our industry.”
A shareholder vote on the Netflix deal has also been set for March 20 at 8 a.m. ET.
Paramount reiterated that its $30 per share deal offers a higher value and “more expeditious and certain path to closing a transaction” than Netflix, which it claimed would offer a minimum of $21.23 to a maximum of $27.75 per share.
It also touted the addition of a 25 cent per share “ticking fee,” which is the equivalent of approximately $650 million cash value that would be paid to shareholders for every quarter the transaction is not closed beyond Dec. 31, 2026.
Additionally, Warner Bros. board said that Paramount agreed to bump its bid up to at least $31 per share just for reopening talks, an increase that is not its “best and final” offer.
Netflix has blasted Paramount’s antics as an “ongoing distraction” and accused the company of repeatedly mischaracterizing the regulatory review process by claiming its takeover bid would sail through.
It also warned that the Paramount offer would create “significant horizontal overlaps” that will concern antitrust enforcers, including combining two of the five major Hollywood studios, two major theatrical distribution channels, two of the major TV studios, two major news networks and two major sports distributors.
Additionally, the streamer argued that Ellison’s “aggressive financing package, rapid deleveraging plans, and performance track record pose tremendous risks to both the completion of their proposed deal and the industry” and that Paramount would be over-leveraged with approximately $84 billion in debt.
In order to reach the midpoint of its leverage targets, Netflix claimed Paramount would need to realize roughly $16 billion of cost savings — far in excess of its previously disclosed $6 billion synergy figure — through “greater, even deeper job cuts that would irreparably harm the entertainment industry.” It added that Paramount is undershooting its guidance for 2026 adjusted operating income by 15%, which could mean even more cost cuts.
Meanwhile, Netflix said its own deal with Warner Bros. would “deliver more choice and greater value to audiences worldwide with expanded access to exceptional films and series – both at home and in theaters.”
It also said the deal “is centered on growth, opportunity, and a reinforced commitment to creating world-class films and television – not consolidation and layoffs” and would expand production capacity, increase its investment in original content and create jobs.
Additionally, the company expressed confidence that its deal with Warner Bros. has a “clear path to timely regulatory approval.” It has already submitted its Hart-Scott-Rodino (HSR) filings and is engaging constructively with competition authorities across the world, including the U.S. Department of Justice (DOJ), state attorneys general, the European Commission, and the U.K. Competition and Markets Authority (CMA).
Netflix has said its deal would close within 12 to 18 months, while Paramount has said a potential deal would close within a year.
