The board of Warner Bros. Discovery said Thursday that a revised offer from Paramount Skydance constitutes a “superior proposal” to its existing merger agreement with Netflix, triggering a four-business-day period for Netflix to respond.
Last week, the WBD Board of Directors gave Paramount until Feb. 23 to submit its “best and final proposal,” while making clear that the board continued to favor the Netflix $82.7-billion, all-cash proposal.
In a statement Thursday, the company said, “WBD has notified Netflix of its determination that the PSKY proposal constitutes a `Company Superior Proposal.’ Under the terms of the Netflix merger agreement, this notice triggers a four business day period during which Netflix has the right to propose revisions to the Netflix merger agreement so that the PSKY proposal would cease to constitute a `Company Superior Proposal.”’
The statement added, “Following the conclusion of this period, if the Board determines in good faith, after consultation with its independent financial and legal advisors, that, after considering any revisions to the terms of the Netflix merger agreement proposed by Netflix, the PSKY proposal continues to constitute a `Company Superior Proposal,’ WBD would be entitled to terminate the Netflix merger agreement.”
Netflix and Paramount have been jockeying for months over the sale of Warner Bros. Discovery’s studios and HBO Max streaming business in a deal closely watched throughout the entertainment industry.
Netflix’s offer is to purchase WBD but not all of its cable channels, while PSKY wants to buy the whole company. Warner is planning to spin off its cable channels into a separate company.
Paramount’s latest proposal values the deal at $31 per share and includes several additional incentives. Those include a “ticking fee” of 25 cents per share per quarter beginning after Sept. 30, 2026, and a $7 billion reverse termination fee if the transaction fails to close due to regulatory issues, according to The Hollywood Reporter.
The announcement from Warner Bros. Discovery came hours after Netflix co-CEO Ted Sarandos met with White House officials in Washington, D.C. to discuss the proposed deal. Details of the meeting were not disclosed.