Warner Bros. Discovery is engaging in renewed discussions with Paramount, a company owned by Skydance, to consider their final offer. This move comes as Warner Bros. Discovery continues to support the deal it made with Netflix for its studio and streaming business. The company, known for its valuable content like the “Harry Potter” series and DC superhero franchise, stated in a regulatory filing that Netflix has granted them a waiver to reopen talks with Paramount for a limited period.
The objective of these talks is to address any outstanding issues and clarify terms in Paramount’s latest proposal. While Paramount had previously made unsuccessful bids, including a hostile bid in December, Warner Bros. has stood firm on its commitment to the Netflix merger. The company’s leadership, led by Chairman Samuel DiPiazza Jr. and CEO David Zaslav, expressed in a letter to Paramount that they have not found Paramount’s proposal to be superior to the Netflix deal.
The deal with Netflix involves the acquisition of Warner’s studio and streaming business for $72 billion in an all-cash transaction, encompassing various entertainment assets such as HBO Max. The total enterprise value of the deal, including debt, amounts to approximately $83 billion. Paramount, on the other hand, aims to acquire Warner’s entire company, including networks like CNN and Discovery, with an all-cash offer of $77.9 billion made in December.
In response to the renewed talks with Paramount, Netflix reiterated its confidence in the existing agreement with Warner Bros. Despite the ongoing discussions, Netflix stated that it remains confident in the value and certainty provided by its deal. Paramount, however, has indicated a willingness to increase its offer to $31 per share pending further engagement.
Both Paramount and Netflix have been making efforts to sweeten their deals, with Paramount including incentives like a “ticking fee” and a commitment to cover Warner’s breakup payout owed to Netflix. The potential acquisition of Warner’s extensive film and TV library, featuring iconic titles like “Casablanca” and popular shows like “Game of Thrones,” has raised concerns within the entertainment industry, and any final agreement will undergo regulatory review.
Warner Bros. has a shareholder meeting scheduled for Friday to vote on the Netflix merger, with the stock experiencing a positive uptrend. Paramount’s stock also saw a rise, indicating the market’s interest in the ongoing negotiations between the companies.