Warner Bros. warms to Paramount’s “superior proposal” and gives Netflix four business days to counter
For a while, it felt like Netflix had the Warner Bros. Discovery deal in the bag, but recent days have seen the pendulum swing over to Paramount Skydance. In fact, the board of Warner Bros. Discovery released a statement saying Paramount’s latest offer is a “superior proposal” to Netflix’s existing offer.
Warner Bros. on Paramount’s New Offer
In a statement released today, Warner Bros. Discovery say it has “notified Netflix of its determination that the PSKY proposal constitutes a ‘Company Superior Proposal.’ Under the terms of the Netflix merger agreement, this notice triggers a four business day period during which Netflix has the right to propose revisions to the Netflix merger agreement so that the PSKY proposal would cease to constitute a ‘Company Superior Proposal.’ Following the conclusion of this period, if the Board determines in good faith, after consultation with its independent financial and legal advisors, that, after considering any revisions to the terms of the Netflix merger agreement proposed by Netflix, the PSKY proposal continues to constitute a ‘Company Superior Proposal,’ WBD would be entitled to terminate the Netflix merger agreement.“
The statement continues: “PSKY’s proposal includes a purchase price of $31.00 per WBD share in cash, plus a daily ticking fee equal to $0.25 per share per quarter beginning after September 30, 2026, as well as a $7 billion regulatory termination fee payable by PSKY in the event the transaction does not close due to regulatory matters, payment by PSKY of the $2.8 billion termination fee that WBD would be required to pay to Netflix to terminate the existing Netflix merger agreement, an obligation of Larry J. Ellison and an associated trust to contribute additional equity funding to the extent needed to support the solvency certificate required by PSKY’s lending banks, and a ‘Company Material Adverse Effect’ definition that excludes the performance of WBD’s Global Linear Networks segment.“
Netflix will have 4 business days to respond with a new deal, so we should hear something before March 4 at 11:59 p.m. ET.
Paramount Skydance chief David Ellison responded, saying, “We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing.“
Some Major Figures Oppose the Netflix Deal
Many folks in the entertainment industry have chimed in on the potential Netflix deal, including “humble movie farmer” James Cameron, who spoke out against the streaming service acquiring Warner Bros. “I believe strongly that the proposed sale of Warner Bros Discovery to Netflix will be disastrous for the theatrical motion picture business that I have dedicated my life’s work to,” he said.
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