Paramount on Thursday continued to insist it made a superior offer for Warner Bros. Discovery, compared to that of Netflix, despite pushback from the WBD board of directors.
Netflix agreed last year to acquire Warner Bros. Discovery’s film and television studios and streaming platform, HBO Max, in a cash-and-stock deal valued at $27.75 per Warner Bros. Discovery share. Paramount, a Skydance Corporation, then launched a hostile takeover bid for all of Warner Bros. Discovery, including cable assets that Netflix left behind.
WBD Board of Directors Chair Samuel A. Di Piazza Jr., reiterated the board’s recommendation in support of the Netflix deal on Wednesday and recommended that shareholders reject Paramount’s offer. This irked Paramount, which issued a press release suggesting that concerns raised by WBD were addressed in an amended proposal.
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“Paramount cured every issue raised by WBD on December 17, most notably by providing an irrevocable personal guarantee by Larry Ellison for the equity portion of the financing. Nevertheless, WBD continues to raise issues in Paramount’s offer that we have already addressed, including flexibility in interim operations,” Paramount claimed in a press release.
“Paramount’s offer is superior to WBD’s existing agreement with Netflix and represents the best path forward for WBD shareholders. $30.00 per share in cash is easy to value. Netflix’s transaction, on the other hand, contains multiple uncertain components and has already decreased in total value,” the release continued. “When announced in December, the Netflix transaction offered WBD shareholders $23.25 in cash, $4.50 in Netflix stock and a share in the pending spin-off of Discovery Global. Today, Netflix’s stock price is trading well beneath the low end of its collar, reducing the value offered to WBD shareholders.”
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Paramount added a claim that WBD’s Board has not “disclosed any analysis to help its shareholders value their potential ongoing ownership of the linear stub,” noting that Versant Media is “its closest comparable” which “illustrates the challenged path ahead” for Discovery’s cable assets.
Paramount CEO David Ellison also issued a statement asserting that his company’s offer is superior.
“Our offer clearly provides WBD investors greater value and a more certain, expedited path to completion. Throughout this process, we have worked hard for WBD shareholders and remain committed to engaging with them on the merits of our superior bid and advancing our ongoing regulatory review process,” Ellison said.
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Di Piazza Jr. previously insisted the Paramount offer is “inferior.”
“The Board unanimously determined that Paramount’s latest offer remains inferior to our merger agreement with Netflix across multiple key areas,” Di Piazza said.
“Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed,” Di Piazza continued. “Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount’s offer would impose on our shareholders.”
Warner Bros. Discovery did not immediately respond to a request for comment.
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