Key Takeaways
- Warner Bros. Discovery has set a Feb. 23 deadline for Paramount Skydance to deliver its final offer.
- Netflix’s all-cash proposal sits at $27.75 per share while Paramount’s recent bid reached $30 per share.
- President Trump issued a warning on Truth Social targeting Netflix board member Susan Rice.
- Regulatory approvals from U.S. antitrust authorities and German officials have cleared for Paramount as of Feb. 19.
- Prediction markets favor Netflix with 49% odds versus Paramount’s 37% chance of sealing the acquisition.
The clock is ticking for Paramount Skydance (PSKY) as it enters the final stretch of its pursuit to acquire Warner Bros. Discovery (WBD).
Paramount Skydance Corporation Class B Common Stock, PSKY
Warner Bros. Discovery has established Feb. 23 as the final date for Paramount to present its ultimate proposal. This ultimatum follows Warner’s decision to reopen negotiations with Paramount in recent days.
The entertainment giant’s latest proposal valued Warner Discovery at $30 per share, sweetened with an additional 25 cents per share quarterly “ticking fee” for any delays extending past the end of 2026.
Netflix (NFLX) stands as the primary competitor in this high-stakes acquisition battle. The streaming powerhouse reached an agreement in December to purchase Warner Bros. at $27.75 per share, structuring the deal to spin off Discovery Global cable properties to existing shareholders. Netflix converted its proposal to an all-cash transaction last month.
While Paramount’s valuation exceeds Netflix’s offer, the absence of an all-cash structure creates complications for Warner’s decision-makers.
The Current Betting Landscape
Polymarket, a prominent prediction platform, currently assigns Netflix a 49% probability of successfully completing the Warner acquisition. Paramount trails slightly with 37% odds. These narrow margins underscore the uncertainty surrounding the outcome as the week unfolds.
Warner shares dipped 0.1% to $28.72 in premarket trading Monday. Netflix declined 0.6%, while Paramount gained 1%.
Market watchers are focused on whether Paramount will increase its offer beyond $30 per share to secure victory over Netflix.
Presidential Intervention Complicates Matters
President Donald Trump injected himself into the proceedings this weekend through a Truth Social post, threatening Netflix with unspecified “consequences” unless the company removes Susan Rice, who served in the Obama and Biden administrations, from its board of directors.
This political dimension introduces an unpredictable element to an already complex corporate transaction.
Trump maintains strong ties with Paramount CEO David Ellison and his father Larry Ellison, who serves as executive chairman of Oracle (ORCL). The White House’s apparent preference for Paramount hasn’t escaped the attention of market participants.
On the regulatory side, Paramount achieved a significant milestone on Feb. 19 when the mandatory U.S. antitrust review period concluded after the company satisfied a Department of Justice data request.
German foreign investment regulators have also granted their approval, eliminating another potential obstacle.
Paramount’s financial condition presents challenges. The company operates with a debt-to-equity ratio of 1.23 and an Altman Z-Score of 0.89 — metrics indicating potential financial strain. The net margin registers at -0.05%.
Revenue expansion over the last three years reached only 0.3%, while the operating margin stands at 8.38%.
Wall Street analysts maintain a hold recommendation on the shares with a consensus price target of $14.18. Institutional investors control 32.82% of shares, while company insiders hold a mere 0.77%.
The stock’s P/S ratio of 0.26 and P/B ratio of 1 indicate the market may be valuing shares below their asset base.
As Monday progresses, industry observers await Paramount’s decision on whether to submit an enhanced bid before Warner’s cutoff time arrives.
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