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Warner Bros. Discovery has restarted sale talks with Paramount, giving the media conglomerate seven days to submit its “best and final” bid or step aside to agree to an $83 billion acquisition of Netflix.
The move is an attempt by the WBD board to force Paramount to either improve its bid or abandon its attempt after multiple rejections since October. Netflix gave WBD a week’s grace to discuss with Paramount and “fully and finally resolve this matter.”
A person closely familiar with the situation called it an “either go up or be shut up” moment for Paramount, which has made a hostile bid of $108 billion for the entire company, including cable TV properties that are not part of the Netflix deal.
The effort to forcibly take over Paramount is the latest move in a high-stakes battle for control of Warner Bros., which owns some of the world’s most valuable film and TV properties. harry potter To Friend.
WBD Chief Executive David Zaslav said in a statement that his company would hold talks for a week to determine whether Paramount could address the “deficiencies” in its proposal and present “an actionable, binding proposal that offers better value”.
Warner also revealed on Tuesday that he will vote on the Netflix deal on March 20. The WBD board said it is in favor of the Netflix deal and is recommending that shareholders reject the Paramount offer.
The catalyst was an approach to a WBD executive by a “senior representative” of Paramount, who suggested last week that the company might raise its offer from $30 to $31 a share, WBD said in a statement.
A Paramount representative also said the bid could go higher. But according to WBD no new proposal came forward.
Until last week, Paramount had said that its current offering was sufficient.
Inside Paramount, the debate focuses on how much higher it should go, considering that its current offering is already better than Netflix because it has a better chance of winning antitrust clearance.
WBD investors have indicated they would expect at least $33 per share to entertain a competing bid for Netflix.
Netflix said its bid was final during original negotiations last year. A person familiar with the group’s thinking said it will “continue to remain disciplined” while considering whether it needs to raise its offer to counter any increase from Paramount.
Paramount shares were trading about 4 percent higher in premarket trading Tuesday, while WBD shares were about 3 percent higher, having closed at $28 the previous trading day.
Paramount said Tuesday that the WBD board’s latest reaction to its proposal was “unusual.” But the company said it was “ready to engage in good faith and constructive discussions”.
Paramount last week softened its $108 billion hostile bid for WBD, offering to pay shareholders if regulators delayed completing the transaction. But it fell short of raising its offer. The company also expressed doubt over Netflix’s ability to secure regulatory approval for the WBD acquisition.
Netflix responded Tuesday that Paramount does not have an “easy or fast path to regulatory approval.”
“We have granted WBD a nominal seven-day waiver of certain obligations under our merger agreement so they can fully and finally resolve this matter with (Paramount),” Netflix said.
It said Paramount “repeatedly misrepresented the regulatory review process by suggesting its proposal would pass, thereby misleading WBD stockholders about their true exposure to regulatory challenges around the world”.
Paramount last week won an ally in activist investor Ancora Holdings, which took a $200 million position in WBD and came out against the Netflix deal.
Paramount is also discussing nominating Pentwater Capital Management, a top Warner Bros. Discovery shareholder, to the company’s board as part of its fight for control.
Paramount was not immediately available for comment.
