It appears to be the conclusion of a battle that has been ongoing since last year over the acquisition of assets belonging to Warner Bros. Discovery (WBD), which include the television station TVN. The WBD board determined that the purchase offer submitted by Paramount Skydance was superior to Netflix’s proposal. The streaming giant conceded and withdrew from submitting a competing bid.
The Warner Bros. Discovery board formally recognized the new acquisition offer from Paramount Skydance as better than the one previously submitted by Netflix.
Paramount offered $31 per share for the entire company (one dollar more than before), plus an additional $0.25 for each quarter of delay in finalizing the transaction, starting from October of this year. In addition, the company pledged to pay $2.8 billion to terminate the agreement with Netflix and $7 billion in compensation if the transaction were blocked by regulators.
The agreement signed by Netflix with WBD provided for the purchase of the company at $27.75 per share, but excluded the division containing television channels such as CNN, TNT, MTV, and Poland’s TVN. Under that arrangement, those channels would have remained under the control of their current owners.
Paramount’s offer concerns the acquisition of the entire company and, according to reports, is favored by the administration of Donald Trump. Trump himself stated that any potential transaction should result in a change of ownership at CNN, which he accuses of bias. On Wednesday, Republican attorneys general from 11 states also opposed the takeover of WBD by Netflix, filing a request with the Department of Justice to block the deal due to concerns about monopolization within the streaming platform sector. Paramount Skydance is headed by David Ellison, the son of billionaire Larry Ellison, a supporter of Trump.
According to Ellison, the decision to recognize his company’s offer as superior was unanimous.
“We are pleased that the WBD Board unanimously confirmed that our offer is highly attractive in terms of price, delivering greater value for WBD shareholders as well as certainty and speed in closing the transaction,” he said. Under the terms of the agreement between WBD and Netflix regarding the acquisition, Netflix now has four days to improve its offer, after which WBD will make a final decision on the matter.
Netflix backs down
Netflix executives announced that they had declined to submit a new bid for the acquisition of Warner Bros. Discovery.
“The transaction we negotiated would have delivered value to shareholders and provided a clear path to securing regulatory approval,”
Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement.
“However, we have always maintained financial discipline, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive to us. Therefore, we are declining to match Paramount Skydance’s bid,”
they added.
The company’s decision means that, after months of efforts, Paramount Skydance now has a clear path to acquiring Warner Bros. Discovery (WBD), along with its television channels, including Poland’s TVN and CNN.