Warner Bros. Discovery confirmed Tuesday that it has received a revised takeover offer from Paramount and is currently reviewing the proposal with its financial and legal advisors. The media giant did not disclose specific terms of the new bid, maintaining its recommendation that shareholders support the existing Netflix merger agreement. This latest development comes as the waiver period for active engagement between the two companies approaches its deadline at 11:59 p.m. ET.
According to the company’s statement, the Warner Bros. Discovery board will update shareholders following its review of the Paramount proposal. WBD advised shareholders not to take any action regarding the amended Paramount tender offer at this time. The Netflix merger agreement remains in effect as the preferred transaction.
Paramount Raises Warner Bros. Discovery Takeover Bid
Paramount confirmed it submitted a revised proposal but declined to provide specific details about the enhanced offer. The David Ellison-run company has been working to address concerns raised by Warner Bros. Discovery regarding debt financing, equity financing, and other deal-related matters. Previous reports indicated that Paramount was willing to increase its offer from the initial $30 per share to $31 or higher.
Meanwhile, Paramount stated it will maintain its previous tender offer as a placeholder while WBD conducts its review. The company characterized the Netflix deal as “inferior” in its statement, though the tone was notably less combative than in previous communications.
Background of the Bidding War
The takeover battle began when Warner Bros. Discovery agreed on December 5 to sell its studios and streaming assets to Netflix in a transaction valued at $27.75 per share. The deal had an enterprise value of approximately $82.7 billion and included plans to spin off WBD’s cable business into a separate entity called Discovery Global.
However, just three days after the Netflix agreement was announced, Paramount launched a hostile takeover bid at $30 per share in cash for all of Warner Bros. Discovery. The hostile tender offer valued the enterprise at $108 billion, setting off an intense competition for control of the media company.
Additionally, Netflix modified its strategy on January 20 by switching its bid to all-cash, according to regulatory filings. The streaming giant holds matching rights under its merger agreement, meaning it can counter any superior proposal from Paramount.
What Happens Next in the Warner Bros. Discovery Deal
For Paramount to succeed, the Warner Bros. Discovery board must determine that the revised proposal constitutes a “Company Superior Proposal” under the Netflix merger agreement. This would trigger a four-business-day match period during which Netflix could exercise its matching rights. The Netflix merger agreement would then need to be terminated before a definitive merger agreement with Paramount could be executed.
In contrast, Wall Street analysts have speculated that Paramount may need to offer between $31 and $32 per share, or potentially higher, to secure the deal. The board has a fiduciary duty to consider all offers that could deliver superior value to shareholders.
Warner Bros. Discovery has scheduled a special shareholder meeting for March 20 to vote on the Netflix agreement. The outcome of the current review and any potential matching offer from Netflix will likely determine whether that vote proceeds as planned or if the deal landscape shifts once again.