August M
A fierce takeover battle over one of Hollywood’s most powerful media groups has taken a decisive turn. After months of competing offers and political attention, one contender has chosen to walk away.
The move reshapes the path forward for the owner of HBO, CNN, and Warner Bros. studio, reports NBC News.
Bidding war shifts
NBC News reported Thursday that Netflix will not increase its offer for Warner Bros. Discovery after the company’s board determined that a revised proposal from Paramount Skydance was “superior.”
That decision effectively clears the field for Paramount Skydance, led by CEO David Ellison, to pursue control of the full company.
Paramount’s proposal covers all of Warner Bros. Discovery. Netflix had been seeking selected assets, including the streaming platform, HBO’s cable network and the film studio division.
In a statement cited by NBC News, Netflix said: “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
Co-CEOs Ted Sarandos and Greg Peters added that “this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Deal terms revised
According to NBC News, Paramount earlier this week lifted its offer to $31 per share, a bump from its previous proposal. That price implies an equity value of roughly $77 billion for Warner Bros. Discovery.
When the company’s outstanding debt is factored in, the total transaction value would rise above $110 billion, reflecting the full enterprise value of the business.
NBC News also reported that Paramount included a $7 billion reverse termination fee should regulators block the merger, along with provisions to cover costs tied to unwinding Warner Bros. Discovery’s earlier agreement with Netflix.
“We are pleased WBD’s Board has unanimously affirmed the superior value of our offer,” Ellison said, adding the agreement would bring “certainty and speed to closing.”
Next steps ahead
Shareholders are scheduled to vote on the proposal in March, NBC News reported. The board would also need to formally end its arrangement with Netflix before finalizing any new agreement.
Warner Bros. Discovery CEO David Zaslav said that once the board “votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders.” Chairman Samuel Di Piazza said he was “extremely proud of the rigorous process this Board has run.”
Investor Mario Gabelli, whose firm owns more than 5 million shares, told NBC News that “the board finally woke up and did the math,” describing Paramount’s bid as offering stronger value.
If completed, the combination would bring together assets such as CNN and CBS News, while placing HBO and Showtime under the same corporate ownership.
Sources: NBC News
