Paramount Skydance has issued an extension on its $30-per-share tender offer for Warner Bros. Discovery and is officially launching a proxy battle aimed at blocking Netflix’s $83 billion deal.
The offer, which was set to expire on Wednesday at 5 p.m. ET, will now be extended to Feb. 20. The latest extension comes after the deadline was pushed from Jan. 8 to Jan. 21 in December.
As of Wednesday, 168.5 million shares, or around 7% of WBD’s total 2.48 billion outstanding shares, have been validly tendered and not withdrawn, though shareholders can do so at any time before the deadline.
In addition to the extension, Ellison has filed materials to solicit WBD shareholders to vote against Netflix’s revised, $83 billion all-cash deal and the spinoff of Discovery Global, as well as a proposal for WBD executives’ compensation arrangements tied to the deal. The move comes after Paramount previously announced its intention to nominate directors to Warner Bros. Discovery’s board to engage further with its offer.
The latest filing signals that Paramount is content to hold firm on its offer for WBD — at least for now. Both Warner Bros. and its shareholders have indicated a willingness to consider a higher Paramount bid, although Netflix has a right to match any offer.
In a letter to shareholders, Paramount CEO David Ellison reiterated that his $30 per share offer is “significantly greater and far more certain” and said that WBD was “rushing to solicit shareholder approval” on the Netflix deal. He added that the consideration paid to shareholders in the Netflix transaction falls “well short” of Paramount’s offer.
Warner Bros. again dismissed those sentiments.
“Once again, Paramount continues to make the same offer our Board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix. It’s also clear our shareholders agree, with more than 93% also rejecting Paramount’s inferior scheme,” Warner Bros. Discovery said in a statement. “We are confident in our ability to achieve regulatory approval for the Netflix merger and look forward to delivering the tremendous and certain value our agreement will provide to Warner Bros. Discovery shareholders.”
Paramount’s $108.4 billion bid is backed by Oracle co-founder Larry Ellison’s irrevocable personal guarantee towards $40.4 billion of the equity financing, and $55 billion in debt financing from Bank of America, Citigroup and Apollo Global Management. Its other equity partners include RedBird Capital Partners and three Middle Eastern sovereign wealth funds.
Ellison also argued that the Netflix deal would “materially entrench” the streamer’s market dominance, giving it an estimated 43% share of global SVOD subscribers and lead to higher prices for consumers, reduced compensation for content creators and talent, and significant harm to American and international theatrical exhibitors.
“Netflix’s regulatory path is particularly challenged in Europe, where Netflix is by far the dominant streaming service and where WBD’s HBO Max is its only viable international competitor,” the letter continues. “Netflix has unsuccessfully sought to address these concerns by putting forward a non-credible market definition of the streaming market that includes services like YouTube, TikTok, Instagram, and Facebook and that no regulator has ever accepted. By contrast, the combination of Paramount and WBD is pro-competitive, with moviegoers, studio workers and creative talent all set to thrive thanks to the combined company’s expanded theatrical film production and content.”
Shareholders are expected to vote on the Netflix deal by April, although they could decide even earlier. A threshold of just 20% of WBD shareholders who have held the stock for at least a year would be needed to call a special meeting before then.
Netflix’s revised all-cash deal for Warner’s studio and streaming assets is valued at $27.75 per share, with WBD shareholders also expected to benefit from the cable network spinoff Discovery Global in the next six to nine months.
The deal will be financed with $20 billion in cash on hand and $52 billion in acquisition debt. Netflix said it would assume $10.7 billion in net debt for Warner Bros. studios & streaming business.
Warner Bros. said in additional disclosures released on Tuesday that it believes the spinoff could be worth up to $6.86 per share. Discovery Global is expected to have $17 billion in debt as of June 30, 2026, which will decrease to $16.1 billion by the end of 2026, per the new disclosure.
Paramount, which sued to obtain additional disclosure around how the Netflix deal and Discovery Global were valued, has previously argued that the latter is worth between nothing and 50 cents. The company tried to expedite the proceedings of that lawsuit, but a judge dismissed its motion, ruling that it failed to demonstrate it would suffer irreparable harm. The ruling was based on the company’s standing and did not pertain to the merits of its claim.
On Thursday, Paramount said that WBD “continues to withhold highly material information about Discovery Global while moving forward to seek shareholder approval that will cut off any ability for WBD shareholders to receive the benefits of Paramount’s value-maximizing offer.” It added that the board refused to engage with Paramount’s representatives after reopening negotiations with Netflix on its transaction.
It took aim at the board’s projections for Discovery Global, arguing that a discounted cash flow analysis revealed a value as low as 72 cents per share. The media giant also warned that if some or all of Discovery Global’s debt needs to be allocated back to Warner Bros.’ streaming and studios business, the Netflix deal’s consideration for shareholders could be reduced.
If leveraged in line with Comcast cable network spinoff Versant, Paramount said Discovery Global would only be able to support roughly $5.1 billion in debt and that $11.9 billion would be transferred reducing the cash per share from Netflix to WBD shareholders to roughly $23.20.
“Despite the fact that the capital structure of Discovery Global will directly determine the actual amount WBD shareholders receive in the Netflix
transaction, and WBD will be required to disclose such information as well as full financial information about Discovery Global at the time of the separation, WBD plans to solicit shareholder approval for the Netflix transaction without this information,” Paramount said. “This is even more extraordinary given that the WBD Board uses claims about the value of the Discovery Global equity as a basis for asserting the transaction delivers more than Paramount’s $30 per share all-cash offer.”
Both Paramount and Netflix are engaging with regulators, including the Department of Justice and European Commission. The DOJ’s Antitrust Division has issued second requests for information on both Netflix’s deal and Paramount’s tender offer.
Netflix expects a deal to close within 12 to 18 months from when its deal was first announced, while Paramount has said a potential deal would close within a year. Analysts, however, believe either approval process could drag on longer than expected.
If Warner Bros. abandons the deal with Netflix, it would be required to pay the streamer a $2.8 billion termination fee. If the deal is blocked by regulators, Netflix would pay WBD a $5.8 billion breakup fee.
