Streaming Shock: Paramount’s Bold Bid to Topple Netflix
Paramount Skydance raises its $31-per-share takeover offer for Warner Bros Discovery, intensifying the streaming merger battle with Netflix.
Paramount Skydance has strengthened its offer to acquire Warner Bros. Discovery, an offer that could finally knock rival bidder Netflix out of the game.
Warner Bros., which put itself up for sale last year, said Paramount has agreed to increase its offer by $1 per share, resulting in a bid that its board determined "could reasonably be expected to receive a better offer."
Warner Bros. said it would engage in further negotiations before making a final decision on whether to abandon the deal it struck with Netflix in December.
Netflix, which will have four days to make a counter-offer, did not immediately comment.
Netflix co-chief executive Ted Sarandos declined to say whether the company was prepared to join the bidding war, calling the back-and-forth talks "part of the process."
"I don't want to make any hypotheticals," he said before Paramount's new bid came in. "We very much like the deal we have right now. We're a very disciplined buyer and always have been."
He later added, "It's all a price-discovery process."
Paramount, backed by tech billionaire Larry Ellison and led by his son David, has been campaigning vigorously to acquire Warner Bros. since last year as it seeks to transform itself into a major Hollywood company.
But Warner Bros. has so far rejected Paramount's offers. Instead, in December, it said it had agreed to sell its film and streaming divisions, including HBO, to Netflix in a deal valued at $27.75 per share, or approximately $82 billion (£61 billion), including debt.
Warner Bros. said it would spin off its remaining businesses, including traditional television networks, as an independent company.
Following the rejection, Paramount has improved its original proposal, offering $30 per share to acquire the entire company. However, this is the first time the company has officially agreed to a higher payment.
Warner Bros. said Paramount has now offered $31 per share in cash, with additional payments if completion is delayed.
It also agreed to pay $7 billion if the deal fails and the $2.8 billion fee that Warner Bros. agreed to pay Netflix if the merger plan collapses.
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Lawmakers have expressed concerns about both proposals, citing the potential for monopoly and the impact on the broader entertainment industry.
At a hearing in Washington earlier this month, Sarandos faced questions about potential price hikes and the future of cinemas.
The Ellison family's ties to the Trump administration have also drawn attention from Democrats.
Warner Bros. said the firm would "engage in further discussions... to determine if a proposal that is better than the company's... can be reached," it said. In an interview before Paramount's offer was revealed, Luke Stillman, managing director of US media and advertising consultancy Madison & Wall, said he believed Warner Bros. was looking to start a bidding war. He said he believed the price could ultimately go as high as $33 per share.
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