Warner Bros. Discovery activist investor Ancora Holdings praised the board for reopening “necessary discussions” with Paramount Skydance CEO David Ellison on Tuesday about his bid for the entire company.
“We’re pleased that Warner Brothers Discovery has acted on shareholder feedback by working with Netflix to pave the way for necessary discussions with Paramount Skydance,” a spokesperson for the firm told TheWrap. “It’s time for the Board to establish a level playing field that produces the highest and most viable offer. Given that insiders, including CEO David Zaslav, will make hundreds of millions of dollars as a result of any sale, shareholders’ expectations and scrutiny will remain extremely high to ensure the best deal is ultimately secured.”
On Tuesday, Warner Bros. said that Netflix agreed to grant the company a limited waiver to reengage with Paramount for seven days, with Ellison’s “best and final” offer due Feb. 23.
During the seven-day period, the two parties will discuss the unresolved deficiencies and clarify certain terms in Paramount’s latest amended $30 per share offer. However, the board continues to recommend the streamer’s $83 billion deal and is urging shareholders to vote against the Paramount offer.
A shareholder vote on the Netflix deal has also been set for March 20 at 8 a.m. ET.
The move comes after Ancora, which has roughly $11 billion in assets under management, built a $200 million stake in Warner Bros. and released a 51-page presentation to investors detailing why it plans to oppose the Netflix deal.
Ancora’s president of alternatives James Chadwick also said the firm plans to grow its Warner Bros. stake and that he is interviewing potential director candidates as they mull launching a proxy fight to replace members of WBD’s board if they fail to adequately engage with Paramount.
“This is a huge deal. It’s transformative. It’s a once in a lifetime chance for them,” Chadwick told CNBC in an interview last week. “Ultimately this is the board’s chance to not fall down and do the right thing for shareholders.”
It also comes as Ellison has signaled a willingness to budge on his $30 per share offer. WBD’s board said it was informed by a senior representative from Paramount that the media giant was willing to up its takeover bid to $31 per share just for reopening talks, adding that the increase isn’t its “best and final” offer.
Netflix retains the right to match any offer and expressed confidence that its current deal is “the only certain path to delivering value to WBD’s stockholders.”
It also knocked Paramount for the”ongoing distraction” caused by its antics and reiterated that its own deal “is centered on growth, opportunity and a reinforced commitment to creating world-class films and television – not consolidation and layoffs.”
It also said its deal with Warner Bros. has a “clear path to timely regulatory approval.” Netflix has said the deal would close within 12 to 18 months, pending regulatory approval, while Paramount has said a potential deal would close within a year.
Shares of Paramount are up 6.4% on Tuesday following the announcement, while Warner Bros. stock is up 3.6% and Netflix is down 0.2%.
