In an effort to sweeten Paramount’s bid for Warner Bros. Discovery, David Ellison offered David Zaslav a co-CEO and co-chairman title at the combined company, according to The New York Times.
WBD’s board rejected three separate takeover bids for the company thus far, which included one offer for $19 per share, a second for $22 per share and a third for $23.50 per share, the Times reported.
“We are confident that we are the best partner for WBD, with a combination of our two companies creating a scaled Hollywood champion to the benefit of both our companies’ shareholders, consumers and the entertainment industry at large,” Ellison wrote in a letter to WBD’s board and reviewed by the outlet.
Ellison added that analysts, on average, expect value per share to WBD shareholders in a break-up to be around $15 per share — well below its $23.50 per share offer — and that other potential acquirers would need to overcome “significant (perhaps insurmountable) hurdles given their dominant market positions.”
In addition to the co-CEO and co-chairman title, Paramount also offered to increase the portion of the bid paid in cash to shareholders from 60% to 80% and increase the breakup fee from $2 billion to $2.1 billion.
Representatives for Paramount and Warner Bros. Discovery did not immediately return TheWrap’s request for comment on the letter.
The news about the letter comes as WBD has launched a launched a review of strategic alternatives after receiving “unsolicited interest” from “multiple parties” for all or part of its business.
Others who have been floated as potential suitors for WBD’s streaming and studio assets, which will split from Warner’s linear networks business in April, include Amazon, Comcast and Netflix. A Comcast spokesperson declined to comment, while a representative for Amazon did not immediately return TheWrap’s request for comment.
During their third quarter earnings call on Tuesday, Netflix executives said that they would be “choosy” with regard to M&A and reiterated that they have “no interest” in acquiring linear networks.
“It’s true that historically, we’ve been more builders than buyers, and we think we have plenty of runway for growth without fundamentally changing that playbook. Nothing is a must-have for us to meet our goals that we have for the business,” Netflix co-CEO Ted Sarandos explained. “But we focus on profitable growth and reinvesting in our business, both organically and through selective M&A. And when it comes to M&A opportunities, we look at them, and we look at all of them.”
“It’s our responsibility to look at every significant opportunity. We’ve got a clear framework to evaluate those opportunities and we’ll do whatever we think is best to grow the business,” co-CEO Greg Peters added.
In addition to continuing with the split into Warner Bros. and Discovery Global, WBD’s board said they would evaluate separate transactions for those two companies or a deal for the entire combined company. It also said it would consider an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to its shareholders.
There is no deadline or definitive timetable set for this review process. The company noted that it does not intend to make any further announcements about this review until the board approves a specific transaction or determines that further disclosure is necessary.
Shares of WBD closed at $20.53 per share on Wednesday, just below a new 52-week high of $21.22 apiece. The stock is up 172.6% in the past year, 92% year to date, 158.2% in the past six months and 4.6% in the past month.
