Warner Bros. Discovery has decided to reopen discussions with Paramount, owned by Skydance, to consider the company’s final proposal. This move comes as Warner Bros. Discovery remains committed to its existing agreement with Netflix for a studio and streaming collaboration.
In a recent regulatory filing, Warner Bros. Discovery revealed that it has obtained a waiver from Netflix to engage in talks with Paramount for a limited period, allowing both parties to address unresolved issues and clarify terms in Paramount’s latest bid. While Paramount had previously made unsuccessful bids, Warner Bros. Discovery has not altered its stance and continues to endorse the merger with Netflix.
Warner Bros. leadership reiterated their support for the $72 billion deal with Netflix, covering the acquisition of Warner’s studio and streaming operations, including HBO Max. The total deal value, including debt, amounts to around $83 billion, set at $27.75 per share.
The decision to resume discussions with Paramount signifies a change in approach for Warner Bros., following Paramount’s expression of disappointment over lack of engagement from Warner Bros. executives before the Netflix merger announcement.
Netflix, on the other hand, expressed confidence in its agreement with Warner Bros. and granted a seven-day waiver to facilitate the resolution of the ongoing negotiations. Paramount, which aims to acquire Warner Bros. in its entirety, including networks like CNN and Discovery, proposed an all-cash offer of $77.9 billion in December, with a revised bid of $31 per share pending engagement.
Paramount has also added incentives to its offer, such as a “ticking fee” and a commitment to cover Warner’s breakup payout to Netflix. The potential sale of Warner Bros.’ extensive content library, featuring iconic films and popular TV shows, has prompted industry concerns and will undergo regulatory review.
As Warner Bros. prepares for a shareholder vote on the Netflix merger on March 20, both its stock and Paramount Skydance’s stock experienced positive movement in the market. The outcome of these negotiations will not only impact the involved companies but also have implications for the entertainment sector as a whole.
