Warner Bros. Discovery Board to Evaluate Paramount’s New Takeover Proposal
Warner Bros. Discovery (WBD) is set to evaluate a new takeover proposal from Paramount Skydance. This comes in light of an unsolicited tender offer made by David Ellison’s company. The board of WBD will review the offer carefully, ensuring compliance with their fiduciary duties.
Details on the Hostile Takeover Offer
On Tuesday, WBD confirmed receipt of an amended proposal from Paramount Skydance. The offer seeks to acquire all outstanding shares of WBD common stock. In response, WBD stated it will consult with independent financial and legal advisors during this review process.
Implications for the Netflix Agreement
Importantly, WBD will not adjust its recommendation regarding the existing merger agreement with Netflix at this time. The board is expected to communicate its recommendation to shareholders after the evaluation of Paramount’s offer is complete.
- WBD’s response to the tender offer is due within 10 business days.
- Shareholders have been advised against taking any immediate action regarding the Paramount offer.
Paramount’s Enhanced Financial Commitments
Paramount has upgraded its offer to $30 per share, adding significant financial commitments. One key enhancement includes an additional cash payment of 25 cents per share, totaling approximately $650 million each quarter until the acquisition concludes after December 31, 2026.
Additional Offers and Commitments
- Paramount pledged to cover the $2.8 billion termination fee owed to Netflix if the acquisition is successful.
- Netflix and Warner Bros. previously confirmed a $83 billion agreement on December 5.
- Last month, Netflix revised its deal to a pure cash offer of $27.75 per share, moving away from a cash-and-stock arrangement.
Notably, the Netflix agreement does not include the linear TV assets of WBD, which encompass channels like CNN and HGTV, alongside the Discovery+ streaming service, which are set to spin off from WBD.
