Paramount Skydance has reaffirmed its $30 a share offer for Warner Bros Discovery (WBD) a day after the WBD board rejected the offer as “inferior” to Neflix’s bid.
In a statement, Paramount said it “notes [WBD’s] decision not to engage” on Paramount’s all-cash offer but added that the offer is “superior to WBD’s existing agreement with Netflix and represents the best path forward for WBD shareholders.”
Netflix’s cash and stock deal for WBD’s Warner Bros film and TV studio, streaming service and HBO “contains multiple uncertain components and has already decreased in total value” because of a decline in Netflix’s stock price, Paramount claimed.
In rejecting Paramount’s latest offer yesterday, WBD said the bid offered “insufficient value.” Paramount’s statement says it has “diligently and constructively addressed each concern raised by WBD…most notably by providing an irrevocable personal guarantee by Larry Ellison for the equity portion of the financing.”
Paramount chairman and CEO David Ellison (son of Larry Ellison) commented: “Our offer clearly provides WBD investors greater value and a more certain, expedited path to completion. Throughout this process, we have worked hard for WBD shareholders and remain committed to engaging with them on the merits of our superior bid and advancing our ongoing regulatory review process.”
The Paramount statement details the company’s case that its offer is superior to Netflix’s, based in part on the value of Discovery Global, the cable network segment of WBD that is due to split off from the Warner Bros studio later this year.
The statement also says that the companies providing debt financing for its bid are “global sophisticated financial institutions, with decades of experience financing companies and borrowers in history’s largest, most complicated transactions.”
Under Paramount’s December 22 amended offer WBD shareholders have until January 21 to tender their shares and in its latest statement Paramount “urges WBD shareholders to register their preference for Paramount’s superior offer with the WBD Board of Directors by tendering their shares today.”
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