Bloomberg News reported on Sunday that Warner Bros. Discovery’s board is reopening sales discussions with Paramount Skydance, after recently being presented with a revised offer with improved deal terms.
Warner Bros. in December agreed to sell both its film studio and HBO Max streaming service to Netflix at a price of $27.75 per share. Paramount, which owns CBS and MTV, in December introduced a hostile bid for Warner Bros., offering its shareholders $30 per share in an all-cash agreement.
Paramount raised the stakes, indicating that it would impose 25 cents a share fee on its bid in case of any regulatory delay in approving the deal in the previous week.
CNBC.com previously stated that the ticking fee would equate to the cash value of some $650 million per quarter over all quarters that the deal has not been closed by December 31, 2026.
Paramount added that it will also pay a termination fee amounting to $2.8 billion to Netflix in case of termination of the Warner Bros. deal. Paramount also added that it will eliminate $1.5 billion in possible debt refinancing costs.
Bloomberg stated that both Paramount and Netflix have indicated that they would not mind increasing their bids to gain the deal of Warner Bros.
According to the report, this is the first time Warner Bros. has contemplated whether the offer made by Paramount can lead to a better deal or lead to Netflix coming up with better deal terms.
As per the report, Ellison said the new additions to Paramount’s bid “underscore our strong and unwavering commitment to delivering the full value [Warner Bros. Discovery] shareholders deserve for their investment.”
“We are making meaningful enhancements – backing this offer with billions of dollars, providing shareholders with certainty in value, a clear regulatory path, and protection against market volatility,” he said in a statement.
