Warner opens the door to Paramount after raising its purchase offer

The board of directors of Warner Bros. Discovery (WBD) has opened the door to discussing with Paramount Skydance (PSKY) whether an offer that constitutes a “superior proposal” can be reached, after having examined the revised proposal submitted by the company led by David Ellison that raises the purchase price to $31 in cash per share, compared to the previous $30.

WBD’s board of directors has determined that PSKY’s revised proposal “could reasonably result in a ‘superior proposal’ for the company,” as defined in WBD’s merger agreement with Netflix, although it has cautioned that it “has not determined” whether PSKY’s revised proposal is superior to the merger with Netflix.

This revised offer includes an increase in the purchase price to $31 in cash for each WBD share, plus a daily late fee equivalent to $0.25 per quarter starting September 30, 2026, as well as a regulatory fee of $7 billion (€5.942 million) that PSKY must pay in the event that the transaction does not go through due to regulatory issues.

Likewise, the revised proposal contemplates the payment by PSKY of the termination fee of 2,800 million dollars (2,377 million euros) that WBD would have to pay to Netflix to terminate the current merger agreement between both companies.

As such, WBD has indicated that it will continue to collaborate with PSKY to determine whether a proposal can be reached that constitutes a “superior proposal for the company”, as defined in the Netflix merger agreement.

In such case, Netflix will have four business days from the date this situation was determined to negotiate with WBD and propose any revision to the transaction.

However, WBD has warned that there can be no guarantee that the board will conclude that PSKY’s proposed transaction is superior to the merger with Netflix or that WBD’s discussions with PSKY will result in a definitive agreement or transaction, so “the Netflix merger agreement remains in force”, and the WBD board of directors maintains its recommendation in favor of the Los Gatos platform transaction and does not withdraw or modify it.

For its part, Paramount has welcomed the decision of the WBD board and has expressed its willingness to continue collaborating constructively with the owner of HBO Max.

In this sense, he recalled that the formalization of a transaction with WBD would require that the WBD board determine that Paramount’s revised proposal is “superior”, in addition to the expiration of the comparison period of four business days, the termination of the merger agreement with Netflix and the signing of a definitive merger agreement between Paramount and WBD.