Warner Bros. Discovery said it will briefly reopen takeover discussions with Paramount Skydance after receiving a waiver from Netflix, even as its board continues to back its existing merger agreement with the streaming giant.
In a regulatory filing on Tuesday, Warner said it secured a seven-day waiver from Netflix to resume negotiations with Paramount to hear its “best and final” offer. The waiver runs till Monday and will allow the companies to address unresolved “deficiencies” and “clarify certain terms” in Paramount’s latest proposal, PBS reported.
Despite the renewed talks, Warner’s board reiterated its recommendation that shareholders vote in favor of the previously announced merger with Netflix. A special shareholder meeting to vote on that deal has been scheduled for March 20.
In a statement to US media, Netflix said it remained confident that its proposed transaction “provides superior value and certainty" but acknowledged "the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY's antics”.
The company said it granted the waiver to Warner to “finally resolve this matter”. Warner management also reaffirmed its support for the Netflix agreement.
Paramount, however, described the board’s move as “unusual” and said Warner could have determined whether its offer was superior without imposing a deadline. Nevertheless, Paramount said it was “nonetheless prepared to engage in good faith and constructive discussions”.
Paramount added it would continue pursuing its all-cash tender offer of USD 30 per share, which it maintains is superior to Netflix’s proposal, and confirmed plans to move ahead with a proxy fight.
Warner disclosed that a Paramount representative separately indicated the company would increase its offer to USD 31 per share “pending engagement”.
In December, Netflix agreed to acquire Warner’s studio and streaming businesses for USD 72 billion in an all-cash transaction covering its legacy television and film production arms, along with HBO Max.
Including debt, the enterprise value is approximately USD 83 billion, or $27.75 per share. The deal is contingent on Warner completing a previously announced separation of its cable operations.
Paramount, by contrast, has launched a hostile bid to acquire the entire Warner Bros. Discovery company, including assets such as CNN and Discovery. Its USD 77.9 billion all-cash offer, announced days after the Netflix agreement, carries an enterprise value of roughly USD 108 billion including debt, or USD 30 per share.