Warner Bros. Discovery has rejected yet another takeover bid from Paramount. Warner, which has received a number of hostile bids from Paramount, has advised their shareholders to reject the most recent offer in favor of keeping their deal with Netflix. The board wrote in a letter earlier this week, “Your Board negotiated a merger with Netflix that maximizes value while mitigating downside risks, and we unanimously believe the Netflix merger is in your best interest. We are focused on advancing the Netflix merger to deliver its compelling value to you.”
WBD’s deal with Netflix states that they will sell their studios and streaming assets for cash and stock worth $27.75. The Paramount offer lists $30 a share for the whole company. Co-CEO’s Ted Sarandos and Greg Peters said, “The WBD Board remains fully supportive of and continues to recommend Netflix’s merger agreement, recognizing it as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry. Netflix and Warner Bros. will bring together highly complementary strengths and a shared passion for storytelling. By joining forces, we will offer audiences even more of the series and films they love—at home and in theaters—expand opportunities for creators, and help foster a dynamic, competitive, and thriving entertainment industry.”
While both deals seem decent for Warner Bros. Discovery, WB seems to be wary of Paramount’s deal mainly due to the fear of it falling through. If WB Discovery backed out of a deal with Paramount, they would owe $4.7 billion. The WBD board stated, ““The risk-adjusted value of the [Par] Offer is not superior to the Netflix Merger.” The Netflix and WBD merger is still not finalized, so stay tuned for more updates on the deal.
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