Warner Bros. Discovery Reviewing Paramount’s Revised Proposal

Warner Bros. Discovery confirmed today it had a received a revised offer from Paramount “and is reviewing it in consultation with our financial and legal advisors.”

It did not disclose the terms of the new bid. The Pararmount proposal on the table for some time has been for $30 a share in cash but the David Ellison company has bumped that up.

“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. WBD shareholders are advised not to take any action at this time with respect to the amended PSKY tender offer,” WBD said.

The statement was the same the company has issued several times before as Paramount continued to tweak its offer, looking to provide assurances around debt and equity financing and other concerns WBD raised. The board of the David Zaslav-led company has, so far, always come back after each review advising against a Paramount deal and recommending shareholders stick by Netflix.

However, the backdrop of this new offer is different as it followed a seven-day limited waiver period for the sides to actively engage. Netflix had to agree to the discussions.

Paramount confirmed that it submitted a revised bid but it also declined to provide details. As WBD considers, Par said it is maintaining its previous tender as a placeholder. Its statement today was less combative than in the past although it still called the Netflix deal “inferior.”

“The entry into a transaction with WBD would require the WBD Board to determine that Paramount’s revised proposal is a “Company Superior Proposal” under its merger agreement with Netflix, the expiration of a four business day match period, termination of the Netflix merger agreement and execution of a definitive merger agreement between Paramount and WBD,” Paramount said.

Netflix has matching rights.

“While the WBD Board of Directors considers Paramount’s revised proposal, Paramount will continue to maintain its previously announced tender offer and its solicitation in opposition to the inferior Netflix merger.”

Warner Bros. Discovery agreed on Dec. 5 to sell its studios and streaming assets to Netflix in a cash and stock transaction valued at $27.75 a share, with an enterprise value of about $82.7 billion. WBD separately plans to spin off its cable business into a new company called Discovery Global, distributing stock of that company to shareholders.

Three days after the Netflix deal was announced, Paramount launched a hostile tender offer for Par at $30 a share in cash for all of WBD, enterprise value $108 billion, and the fight was on.

On January 20, Netflix switched its bid to all cash.

The WBD board has a fiduciary duty to consider all offers.

WBD had indicated in an SEC filing that Paramount was willing to go to $31 or higher and it expected to see that in writing during the talks, which are set to run through 11:59 p.m. ET tonight if not extended. Netflix has the right to match any offer. Wall Streeters have been pretty certain Paramount would boost its number to $31 or $32 a share but believe it might need to go a bit higher than that to secure the deal.

WBD has set a March 20 special meeting for stockholders to vote on the Netflix agreement.