It looks like the back and forth between Warner Bros. and Paramount still isn’t over. In the latest development, Warner Bros. once again rejected Paramount Skydance’s bid, but gave the Hollywood studio seven days to come up with a “best and final” offer for the company.
The offer Warner Bros. rejected was worth $30 per share. Paramount informally broached an even higher per-share price of $31, Warner Bros. said, apparently enticing the board to the table. However, it looks like it still prefers its deal with Netflix, and the odds of switching are unfavorable.
Warner Bros. said that Paramount has until Feb. 23 to make a new offer, which Netflix is allowed to match under the terms of the merger agreement. “Our board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger,” Warner Bros. Chairman Samuel DiPiazza Jr. and CEO David Zaslav said in a letter sent to the Paramount board on Tuesday. “We continue to recommend and remain fully committed to our transaction with Netflix.”
READ: Warner Bros. to approach Paramount once again for sale (
Last week, Paramount agreed to cover the breakup fee the HBO owner would owe Netflix if it walked away.
The company which ends up acquiring Warner Bros. will get the ownership of its extensive film and television library, which includes classics ranging from “Casablanca” and “Citizen Kane” to wildly popular favorites like “Friends” and “Batman”. Warner Bros. said in its letter it expects a bid above $31 per share, more so because a Paramount financial adviser had orally informed if Warner Bros re-opens deal talks, Paramount would agree to this price, which is not its best offer.
READ: Paramount raises stakes in Warner Bros. deal, offers to pay Netflix exit fee (
“Time is running out for Paramount with this saga wrangling on, for way too long, which is in no one’s interest,” PP Foresight analyst Paolo Pescatore said. “For now, the ball is in Paramount’s court.” Shares of Paramount rose 6%, while Warner Bros Discovery was up 2.3%. Netflix shares were down 1.4%.
Warner Bros. will be moving forward with a vote on the Netflix deal on March 20. The deal, if approved, would take place after Warner Bros spins off its Discovery Global cable operations, which include CNN, TLC, Food Network and HGTV, into a separate, publicly traded company. Discovery Global could fetch between $1.33 per share and $6.86 a share, according to Warner Bros estimates.
Paramount has said the board never “meaningfully engaged” with its six different offers.