WBD says Paramount raised its bid to $31 per share, board will weigh offer against Netflix deal

Warner Bros. Discovery on Tuesday said Paramount Skydance had raised its takeover offer to $31 per share, up from $30 per share, in a proposal that could “reasonably be expected” to top an existing deal with Netflix.

Last week, WBD announced it would reengage Paramount in deal talks under a seven-day waiver from Netflix. WBD and Netflix have an agreement to sell the legacy media group’s studio and streaming businesses to the streamer. Paramount is seeking to buy the entirety of WBD.

“Following engagement with PSKY during the seven-day limited waiver period, we received a revised PSKY proposal to acquire WBD, which we are reviewing in consultation with our financial and legal advisors,” WBD said in a statement Tuesday morning. “We will update our shareholders following the Board’s review. The Netflix merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction.”

Later Tuesday, WBD said the amended Paramount offer was for $31 per share, all cash, and included a $7 billion breakup fee in the event the proposed merger doesn’t win regulatory approval. Paramount has also agreed to pay the $2.8 billion breakup fee that WBD would owe Netflix if it were to abandon that deal, as well as a so-called ticking fee tied to delays in getting regulators’ approval, WBD said.

“The Board has not made a determination as to whether the revised PSKY proposal is superior to the merger with Netflix,” it said in a statement. “WBD will engage further with PSKY to determine if a proposal that constitutes a ‘Company Superior Proposal,’ as defined in the Netflix Merger Agreement, can be reached.”

If WBD deems the new Paramount offer superior, Netflix will have four days to improve its previously agreed-upon bid. Netflix agreed to acquire WBD’s studio and streaming assets for $27.75 per share in December, valuing the assets at around $72 billion, with a total enterprise value of approximately $82.7 billion.

Paramount subsequently launched a hostile tender offer to WBD shareholders for $30 per share for all of WBD, which includes linear cable networks such as CNN, TBS, HGTV and TNT and digital assets including Bleacher Report and House of Highlights.

The Warner Bros. Discovery board said Tuesday it continued to advise shareholders not to take action in response to the tender offer.

A combined Paramount-WBD would bring together HBO Max with Paramount+ along with merging two of the five largest movie studios by revenue — Warner Bros. and Paramount Skydance Studios. It would also put CNN and CBS News under one ownership structure.

Both the Netflix-WBD deal and a potential Paramount-WBD merger would need U.S. and European regulatory approval for completion, and both deals have raised antitrust concerns among critics.