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Paramount's Rival Bid Upsets Netflix Deal
26 Feb
Summary
- Paramount's $31 per share offer deemed superior to Netflix's bid.
- Netflix has four business days to match Paramount's offer.
- Regulatory scrutiny intensifies for the proposed Netflix deal.
Warner Bros. Discovery's board has declared Paramount's latest offer of $31 per share a "superior proposal" to Netflix's existing $83 billion deal. Paramount CEO David Ellison's offer includes a daily ticking fee and a $7 billion termination fee to WBD if the deal fails due to regulatory issues. Paramount would also cover WBD's $2.8 billion termination fee to Netflix and eliminate $1.5 billion in financing costs.
The Ellison family trust is backing the equity financing with a personal guarantee from Larry Ellison, alongside a $57.5 billion debt commitment from major banks. Netflix now has four business days to decide whether to match Paramount's offer. The company's current bid stands at $27.75 per share plus additional equity from a pending spinoff.
This development occurs as Netflix faces increasing scrutiny. The Department of Justice is conducting an antitrust review, and Republican state attorneys general have raised concerns about market concentration. A Senate subcommittee is also scheduled to examine potential competition and monopoly issues related to a Netflix-Warner Bros. combination on March 4.
Shareholders are scheduled to vote on the Netflix deal on March 20. If WBD's board determines Paramount's bid remains superior after considering any Netflix revisions, they may terminate the Netflix agreement. The Netflix deal remains active for now, with the board not altering its recommendation.
