Paramount insists offer superior to Netflix’s Warner Bros. Discovery deal

Paramount on Thursday continued to insist it had made a better offer to Warner Bros. Discovery, compared to Netflix’s offer, despite opposition from WBD’s board of directors.

Last year, Netflix agreed to acquire Warner Bros.’ film and TV studios and streaming platform. Discovery, HBO Max, in a cash and stock deal worth $27.75 per Warner Bros. share. Discovery. Subsequently, Paramount, a Skydance subsidiary, launched a hostile bid for Warner Bros. Discovery in its entirety, including the cable assets Netflix left behind.

WBD Chairman Samuel A. Di Piazza Jr., the board’s recommendation to support the Netflix deal on Wednesday and recommended shareholders reject Paramount’s offer. This angered Paramount, which issued a press release indicating that the concerns raised by WBD would be addressed in a revised proposal.

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“Paramount addressed each 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. However, WBD continues to raise issues in Paramount’s offer that we have already addressed, including flexibility in temporary 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. It is easy to value $30.00 per share in cash. On the other hand, the Netflix transaction has several uncertain components and the overall value has already declined.” “When the Netflix deal was announced in December, it offered WBD shareholders $23.25 in cash, $4.50 in Netflix stock and a stake in Discovery Global’s upcoming spin-off. Today, Netflix’s stock price is trading well below the lower end of its collar, reducing the value provided to WBD shareholders.”

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Warner Bros. announced Discovery announced that its board of directors unanimously rejected Paramount’s tender offer. (Mario Tama/Getty Images/Getty Images)

Paramount added a claim that WBD’s board did not “disclose any analysis to help its shareholders evaluate their potential continued ownership of the linear heel,” noting that Versant Media is the “closest comparable” that “demonstrates the challenging path forward” for Discovery’s cable assets.

Paramount CEO David Ellison also issued a statement asserting that his company’s offering was superior.

“It is clear that our offering provides WBD investors with greater value and a faster and more certain 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 offering and enhancing our ongoing regulatory review process,” Ellison said.

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Last year, Netflix agreed to acquire Warner Bros.’ film and TV studios and streaming platform. Discovery, HBO Max, in a cash and stock deal worth $27.75 per Warner Bros. share. Discovery. (Anna Barclay/Getty Images/Getty Images)

Di Piazza Jr. previously insisted that Paramount’s offer was “inferior.”

“The Board of Directors unanimously determined that Paramount’s latest offer remains inferior to the merger agreement with Netflix across multiple key areas,” Di Piazza said.

“Paramount’s offer continues to deliver insufficient value, including terms such as an extraordinary amount of debt financing that create closing risks and a lack of protection for our shareholders if the transaction is not completed,” Di Piazza continued. “Our binding agreement with Netflix will provide superior value with greater levels of certainty, without the significant risks and costs that Paramount’s bid would impose on our shareholders.”

Warner Bros. did not respond. Discovery immediately requested comment.

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