Warner Bros. Discovery Declares New Paramount Offer Superior; Netflix has four days to counteroffer

The bidding war intensifies, and is he who perseveres enough?

What seemed like a safe sale to Netflix has turned into a real bidding of bigger weights, between the streaming giant and Paramount Skydance.

The conglomerate owned by David Ellisonhas not wanted to lower his hands regarding his plan to acquire Warner Bros. Discovery. In recent days, Paramount Skydance improved its previous offer presented in December to WBD.

Today Thursday, and after due review, Warner Bros. Discovery's board of directors said it has determined that Paramount Skydance's latest offer is a “superior proposal” to its existing merger deal with Netflix.. This decision opens a period of four days for Netflix to present a counteroffer to the agreement of almost $83,000 million dollars that it reached with WBD that has been officially underway since last December 5.

Netflix has four business daysor Wednesday, March 4 at 11:59 p.m. ET, to present a new proposal to save the agreement.

In a statement shared this day, WBD stated about the deadline to the streamer (via Variety):

“Following the conclusion of this period, if the Board of Directors determines in good faith, after consulting with its independent financial and legal advisors, that, after considering any revision to the terms of Netflix's proposed merger agreement with Netflix, PSKY's proposal continues to constitute a 'superior proposal,' WBD will have the right to terminate the merger agreement with Netflix”.

For now, then, Warner Bros. Discovery's deal with Netflix remains in effect, and WBD's board says it continues to recommend in favor of that deal, which will be put to a vote on March 20.

Paramount Skydance's Ellison was pleased in response to WBD's announcement, saying:

“We are pleased that the WBD Board has unanimously affirmed the superior value of our offering, which offers WBD shareholders superior value, certainty and speed of closing.”

THE ELEMENTS OF THE PARAMOUNT SKYDANCE OFFER THAT CHANGED THE COURSE OF WARNER BROS. DISCOVERY

• Increase in purchase price to $31 per share in cash (previously it was $30 dollars).
• Acceleration of the daily commission deadline of $0.25 per quarter to begin after September 30, 2026, until the consummation of the transaction with Paramount, instead of beginning in January.
• Increase in regulatory commission for breakup to $7,000 million of dollars in case the transaction does not close due to regulatory issues.
• He reaffirmed that will pay the $2.8 billion termination fee that WBD would be obligated to pay Netflix to terminate its current merger agreement with Netflix.
• He reaffirmed that will eliminate WBD's potential $1.5 billion financial cost associated with its debt exchange offer.
• Agreed to the obligation to provide additional equity financing to the extent necessary to support the solvency certificate required by PSKY's lending banks.
• Agreed to a definition of “Material Negative Company Effect”, meaning that the price will not be reduced if WBD's linear networks decline faster than expected before the deal closes.

The deal with Netflix, which includes the purchase of Warner Bros. and HBO Max, is valued at nearly $83 billion. Paramount's previous offer was $108 billion in cash for all of WBD, including its linear cable channels. With the addition of $1 per share, to reach $31 per share, Paramount's proposal, presented on February 24, amounts to approximately $111 billion, including the $33 billion of debt that WBD currently has on its books.

The co-CEO of Netflix, Ted Sarandosis in Washington, DC, in an effort to pressure Trump administration officials on the deal. Amid the tense national political environment, the Netflix-WBD deal has become the target of criticism. The Department of Justice (DOJ) has launched a regulatory review that promises to investigate all aspects of Netflix's business, exposing the streaming giant to scrutiny it has never faced before.

INFORMATION IN DEVELOPMENT.