WBD Board Reviews Higher Paramount Offer Against Existing Netflix Deal

Warner Bros. Discovery (WBD) confirmed receiving a higher takeover offer from Paramount Skydance Corp (PSKY) and is reviewing it against its existing agreement with Netflix. The WBD board currently recommends the Netflix transaction, but if the Paramount bid is deemed superior, Netflix will have four days to improve its offer.

Key points

• Paramount's revised proposal is reportedly higher than its previous $30 per share hostile tender offer for all of WBD.
• The existing Netflix merger agreement values WBD's studio and streaming assets at $27.75 per share, totaling about $72 billion.
• If WBD favors Paramount's offer and Netflix does not counter, Netflix is entitled to a $2.8 billion breakup fee, which Paramount has agreed to fund.
• A combined Paramount-WBD entity would merge HBO Max with Paramount+ and unite Warner Bros. and Paramount Skydance Studios.

Why it matters

This development escalates the bidding war for WBD, forcing the board to weigh the immediate, higher offer from Paramount against the previously accepted deal with Netflix, which could result in a significant breakup fee payment.