Paramount's revised offer might be better than Netflix: Warner Bros
What's the story
Warner Bros. Discovery (WBD) has revealed that its board is considering a new proposal from Paramount Skydance (PSKY). The move could lead to a "Company Superior Proposal," as per WBD's merger agreement with Netflix. The revised offer includes an increased cash purchase price of $31 per share, and a daily ticking fee of $0.25 per quarter starting after September 30, 2026.
Proposal
Paramount's updated proposal includes $7B regulatory termination fee
The updated proposal from Paramount includes a $7 billion regulatory termination fee. This would be paid by Paramount if the deal fails due to regulatory issues. It also includes payment of a $2.8 billion termination fee by PSKY, which WBD would have to pay Netflix to end its current deal with them.
Decision pending
WBD board yet to decide if PSKY proposal is superior
WBD has clarified that its board is yet to decide whether the revised PSKY proposal is superior to the merger with Netflix. This gives WBD room to continue talks with PSKY and see if a deal can be reached. If the board decides that a superior proposal from Paramount is in hand, Netflix will have four business days to negotiate and propose changes to its own transaction.
Ongoing support
WBD board continues to support Netflix agreement
Despite the new developments, WBD's board continues to support the Netflix deal. The streaming giant has a $27.75 per share cash deal to acquire Warner's studio and streaming assets. Under this agreement, Warner Bros would spin off its cable networks into a separate public company, with shareholders receiving stock in the new entity.