TLDR
- Paramount Skydance has submitted an enhanced acquisition proposal for Warner Bros. Discovery that surpasses $31 per share, exceeding Netflix’s $27.75 bid
- The WBD board will evaluate this latest proposal before Tuesday’s market opening, though it continues to endorse the Netflix transaction
- Should WBD’s board determine Paramount’s proposal is superior, Netflix will have a four-day window to present a counter-offer
- Paramount CEO David Ellison has declared his unwavering commitment to securing this acquisition
- Financial backing for the bid includes Oracle’s Larry Ellison, RedBird Capital, and Gulf region sovereign wealth funds
Paramount Skydance has delivered an enhanced proposal for WBD, surpassing its earlier all-cash $30-per-share submission. Bloomberg broke the story through confidential sources, though exact terms remain undisclosed at this time.
Warner Bros. Discovery, Inc., WBD
The updated proposal is anticipated to clear $31 per share. Paramount submitted this revised offer within its seven-day negotiating period, which concluded Monday, February 23.
According to Variety, WBD plans to inform investors it will assess Paramount’s submission before Tuesday’s market opening. Nevertheless, the board maintains its official endorsement of the Netflix transaction.
Netflix entered into an agreement to purchase WBD’s studio, television, and streaming operations for $27.75 per share in cash. This proposal encompasses Warner’s motion picture, television, and HBO divisions — though not the entire corporation.
In contrast, Paramount’s proposal targets the complete acquisition of WBD.
Should WBD’s board conclude that Paramount’s revised submission represents a superior transaction, Netflix will receive four days to present a matching or improved offer.
Ellison Remains Committed to Victory
Paramount CEO David Ellison has been transparent about his objectives. He has publicly declared the company’s determination to prevail in this acquisition contest.
On February 10, Ellison modified his proposal to incorporate a quarterly ticking fee, a breakup fee payable to Netflix, and debt restructuring expenses, while maintaining the $30-per-share valuation. WBD subsequently resumed negotiations with Paramount following verbal assurances from Ellison’s representatives to increase the bid to $31 or higher.
Paramount’s proposal enjoys financial support from Oracle chairman Larry Ellison, private equity firm RedBird Capital, and sovereign wealth funds representing Saudi Arabia, Qatar, and Abu Dhabi.
Political dimensions have complicated an already intricate transaction. President Trump intensified tensions this past weekend by publicly calling for Netflix to terminate board member Susan Rice — a former official in the Obama and Biden administrations — or “face the consequences.”
Legislators and entertainment industry professionals have voiced apprehensions regarding media consolidation and potential workforce reductions.
What Lies Ahead for WBD and PSKY
PSKY shares climbed 1.2% during after-hours trading following reports of the increased bid.
Throughout the past year, PSKY stock has declined 9.5%. TipRanks analysts assign it a Moderate Sell rating, comprising zero Buy recommendations, one Hold, and three Sells. The consensus price target stands at $12.33, suggesting approximately 16.8% potential upside from present levels.
Shareholders are scheduled to vote on the Netflix transaction March 20.
Paramount is slated to announce Q4 FY2025 financial results following Wednesday’s market close, February 25. Market analysts project an adjusted loss of $0.01 per share, an improvement from the $0.11 per share loss recorded during the comparable period last year. Revenue forecasts stand at $8.15 billion, representing 2.1% year-over-year growth.
The WBD board’s assessment of Paramount’s enhanced proposal before that earnings announcement could significantly influence market sentiment entering the week.
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