In a positive development for Paramount, the Warner Bros Discovery (WBD) board said on Tuesday afternoon that Paramount’s latest revised offer could turn out to be superior to the Netflix bid.
Paramount and WBD continue to engage after a week-long negotiating window that has brought a revised proposal from Paramount of $31 per share in cash.
The WBD board said Paramount’s revised offer “could reasonably be expected to lead to a ’Company Superior Proposal’ as defined in WBD’s merger agreement with Netflix”.
The board continues to recommend Netflix’s proposal to shareholders, who will meet on March 20 to vote on the matter. However Tuesday’s development has changed the game and Netflix may need to act after a busy press tour in which co-CEO Ted Sarandos has repeatedly expressed confidence in his company’s bid.
Screen understands ongoing talks between WBD and Paramount are open-ended. If the board were to determine that Paramount’s new offer is superior to that of Netflix, the streamer would have four business days to negotiate with WBD and submit revisions to its proposal.
Netflix does not have to wait for that window to start and could submit a revised offer sooner. The company declined to comment when approached by Screen.
Paramount’s revised offer for the entirety of WBD includes a “ticking fee” equal to 25 cents per quarter that kicks in after September 30, as well as a $7bn “regulatory termination fee” that Paramount would pay should the transaction not close due to regulatory matters, and a $2.8bn termination fee that Paramount would pay were WBD not to proceed with Netflix.
The Netflix deal for Warner Bros’ streaming and studios business is valued at $82.7bn, while Paramount’s most recent offer for the entire WBD has been valued at $108.4bn.
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