Warner Bros. Discovery is revisiting discussions with Paramount, a Skydance-owned company, to consider their “best and final” proposal, amid Warner’s commitment to its deal with Netflix. Warner Bros. Discovery, renowned for its ownership of HBO Max and valuable franchises like the Harry Potter series and DC superheroes, shared in a regulatory filing that they received a waiver from Netflix to engage with Paramount for seven days, until Monday, to address unresolved issues and clarify certain terms in Paramount’s latest bid. While Paramount had previously made hostile bids that were rejected by Warner, the current reopening of talks does not indicate a change in Warner’s stance, as reiterated by Warner Bros. chairman Samuel DiPiazza Jr. and CEO David Zaslav in a letter to Paramount.
In December, Netflix agreed to acquire Warner’s studio and streaming business for $72 billion in an all-cash transaction encompassing legacy TV and movie production arms, alongside HBO Max. The total enterprise value, including debt, is approximately $83 billion, or $27.75 per share, pending the finalization after Warner’s cable operations separation.
The decision to engage with Paramount marks a shift for Warner Bros., as Paramount had previously expressed disappointment in the lack of meaningful engagement prior to the Netflix merger announcement. Netflix also affirmed its confidence in the existing agreement with Warner Bros., emphasizing the superior value and certainty it provides.
Paramount, on the other hand, considers Warner’s recent actions as unusual and maintains its offer of $30 per share, deeming it more favorable than Netflix’s proposal. Paramount seeks to acquire Warner’s entire company, including assets like CNN and Discovery, with an all-cash offer of $77.9 billion made in December. Paramount recently informed Warner of its intention to increase the bid to $31 per share pending further discussions.
Both companies are vying for ownership of Warner’s extensive film and television library, featuring classics such as Casablanca and Citizen Kane, as well as popular HBO shows like Game of Thrones. The potential sale raises industry concerns and will undergo regulatory scrutiny. Warner Bros. has a shareholders’ meeting scheduled for Friday to vote on the Netflix merger on March 20, with Warner’s stock showing a positive trend in the market. Shares of Paramount Skydance and Netflix also saw increases before the market opened on Tuesday.