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Paramount Has "Company Superior Proposal": WBD; Netflix on The Clock

Warner Bros. announced that Paramount has the "Company Superior Proposal," meaning Netflix has four business days to submit a revised offer.

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Article Summary

  • Paramount’s revised $31/share bid is now labeled a "Company Superior Proposal" by Warner Bros. Discovery.
  • Netflix has four days to offer a better deal or risk losing its $27.75/share bid for WBD’s streaming assets.
  • Paramount’s offer includes a $7B regulatory fee and $2.8B to cover WBD’s Netflix termination costs.
  • Revised deal terms improve certainty for WBD and limit Paramount’s ability to walk away or renegotiate.

Earlier today, Warner Bros. Discovery's (WBD) board announced that the revised offer from David Ellison's Paramount Skydance is now considered a "Company Superior Proposal." Ellison had this to say in a statement: "We are pleased WBD's board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty, and speed to closing." Here's a brief overview of the details, followed by what's next:

  • Paramount increased its bid to $31 per share in cash (with a daily ticking fee of $0.25 per quarter beginning after September 30th, 2026).
  • $7 billion regulatory termination fee payable by Paramount if a Paramount/WBD deal is blocked due to government regulation.
  • Paramount would cover the $2.8 billion termination fee that WBD would have to pay if the Netflix deal were terminated,
  • "An obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by PSKY's lending banks."
  • A revised "Company Material Adverse Effect" that would exclude how WBD's Global Linear Networks business was performing, strengthening WBD's position while limiting Paramount's options to terminate or renegotiate terms.
Paramount
Image: Fandango YT Screencap; Netflix

What this means is that Netflix now has four business days to adjust its original offer of $27.75 per share for only the streaming service and studios to make its revised offer superior to Paramount's revised offer. "Following the conclusion of this period, if the Board determines in good faith, after consultation with its independent financial and legal advisors, that, after considering any revisions to the terms of the Netflix merger agreement proposed by Netflix, the PSKY proposal continues to constitute a 'Company Superior Proposal,' WBD would be entitled to terminate the Netflix merger agreement." the statement from WBD reads. As for where things currently stand, "The Netflix merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction and has not withdrawn or modified its recommendation."

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Ray FlookAbout Ray Flook

Serving as Television Editor since 2018, Ray began five years earlier as a contributing writer/photographer before being brought onto the core BC team in 2017.
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