Warner Bros. Discovery says it is reviewing Paramount Skydance’s latest revised bid in consultation with its financial and legal advisors after engaging in a seven-day negotiating period.
“We will update our shareholders following the Board’s review. The Netflix merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction,” the company said in a statement on Tuesday. “WBD shareholders are advised not to take any action at this time with respect to the amended PSKY tender offer.”
The move comes after the board asked Paramount CEO David Ellison to submit his “best and final offer” and was granted a limited waiver from Netflix for seven days to resolve deficiencies and clarify certain terms in his latest amended $30 per share offer. Paramount submitted a higher bid on Monday, though specific financial terms were not immediately available.
The tenth bid follows weeks of hostility between Paramount and Warner Bros. over the latter rejecting the former’s various bids and deciding to sell its streaming and studio assets to Netflix in an $83 billion deal.
Netflix is offering $27.75 per share plus additional “stub equity” from the pending spinoff of Warner’s cable networks into Discovery Global, has the option of matching any offer from Paramount.
In an effort to thwart that agreement, Paramount launched a $108.4 billion hostile takeover bid that was taken directly to WBD shareholders. As of Feb. 9, 42.3 million shares had been validly tendered to Paramount, though shareholders can withdraw their shares at any time before the offer’s deadline.
Ellison also sued Warner Bros. in January in an effort to extract more details about how the Netflix deal and Discovery Global spinoff were valued and launched a proxy fight in an attempt to sway shareholders to block the Netflix deal and require a vote to complete the Discovery Global spinoff, which is already on track for later this year. Paramount also plans to nominate its own director candidates to WBD’s board at the company’s annual meeting.
In order to enter into a deal with Paramount, WBD’s board would need to determine that its revised proposal is superior to the Netflix deal. The streamer would then have four business days to match Paramount’s offer. If Netflix decides to walk away, the existing agreement would be terminated and Paramount and WBD would enter a new agreement.
In a statement on Tuesday, Paramount said it will “continue to maintain its previously announced tender offer and its solicitation in opposition to the inferior Netflix merger” while it awaits a decision from the board.
WBD’s review of Paramount’s latest revised bid comes amid new political and regulatory pressures on the Netflix deal, as President Trump has called on the streamer to fire board member and former UN ambassador Susan Rice or “pay the consequences.” Trump’s call over the weekend came after Rice said corporations who “bent the knee” to the administration would face consequences when Democrats return to power.
In an interview with the BBC on Monday, Netflix co-CEO Ted Sarandos brushed off concerns about Rice, saying Trump “likes to do a lot of things on social media” and that approval of the deal will be decided by regulators, not the White House.
“This is a business deal. It’s not a political deal,” Sarandos added.
The Department of Justice has also issued a civil investigative demand (CID) to theater owners, filmmakers and producers amid its antitrust review of the Netflix deal.
Netflix has repeatedly maintained that it has “not been given any notice or seen any other sign that the DOJ is conducting a monopolization investigation.” It also said that any claim that it is a monopolist, or seeking to monopolize, is “unfounded.”
“Our success stems from innovation and investment that benefit consumers,” Netflix chief legal officer David Hyman said. “We neither hold monopoly power nor engage in exclusionary conduct, and we’ll gladly cooperate, as we always do, with regulators on any concerns they may have.”
Shareholders are set to vote on the Netflix deal on March 20 at 8 a.m. ET. Netflix has said it expects a deal to close within 12 to 18 months, while Paramount has said a potential deal with Warner Bros. would close within a year.
