Warner Brothers Discovery is reconsidering the latest purchase bid by Paramount Skydance after taking more time to look over the company’s amended purchase offers. Netflix has granted Warner Bros. Discovery a waiver on Tuesday to reopen deal talks.
Per the Associated Press:
Warner Bros. said in a regulatory filing Tuesday that the waiver will allow it to discuss unresolved “deficiencies” in Paramount’s previous offers.
Warner Bros. now has until Feb. 23 to negotiate a possible transaction with Paramount Skydance.
Last week Paramount upped the ante for its hostile takeover of Warners by adding a 25-cent-per-share ticking fee, adding up to $650 million cash value per quarter. Paramount also said it would pay the $2.8 billion termination fee that would be due to Netflix if Warners rejected the streamer’s offer, the AP reported last Tuesday.
“The additional benefits of our superior $30 per share, all-cash offer clearly underscore our strong and unwavering commitment to delivering the full value WBD shareholders deserve for their investment,” Paramount chair and CEO, David Ellison said in a statement at the time. “We are making meaningful enhancements — backing this offer with billions of dollars, providing shareholders with certainty in value, a clear regulatory path, and protection against market volatility.”
Warners officially rejected Paramount’s eighth bid early in January, but the enhancements to its latest deal has turned heads on the Warners board.
The studio still has concerns over Paramount’s bid, but the board was also being pressured by investors not to reject Paramount’s offer out of hand.
Warner Bros. had agreed to sell its studio and its HBO Max streaming business to Netflix for $27.75 a share. But while the studio has not officially told Netflix that the deal is off, by signaling that they are giving more serious consideration to Paramount’s offer, Warners may be hinting that Netflix needs to step up to sweeten its own bid.
On the other hand, Netflix may be more wary of the deal they have already offered since Netflix shares have been down 40 percent over the drama of the purchase of Warners.
There has been a lot of concern elsewhere over the idea of streaming giant Netflix talking over a film studio.
Early this month, Cinema United, formerly the National Association of Theater Owners, warned of a coming collapse if the Netflix-Warner Bros. merger deal finalizes.
The organization shared in a statement to the Senate antitrust subcommittee that the deal will lead to the shuttering of movie theaters and further job losses.
“If Netflix succeeds in acquiring Warner Bros., the results will be economically and culturally catastrophic: fewer theatres, shorter windows, less revenue, fewer jobs across the national and global entertainment industry, and fewer movies for consumers to see in theatres,” said the six-page statement shared to the Senate Judiciary Subcommittee on Antitrust, Competition Policy & Consumer Rights.
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