On Tuesday, Paramount once again pushed forward an initiative aimed at bolstering their hostile bid for Warner Bros. Discovery, escalating efforts to derail the looming acquisition by Netflix.
The entertainment conglomerate, helmed by David Ellison, specified they would compensate Warner Bros. Discovery (WBD) shareholders with about $650 million for every quarter the Netflix deal fails to materialize, commencing in 2027.
Furthermore, Paramount declared they would remit the $2.8 billion termination fee owed by Warner Bros. Discovery (WBD) to Netflix “in full and promptly” should the Netflix agreement be called off, according to a fresh filing with the SEC.
This announcement surfaces as WBD nears the finalization of an $83 billion transaction to divest its studios and streaming assets to Netflix. Last month, Netflix had upgraded its proposal to be an all-cash offer. (WBD’s remaining cable networks, CNN included, were spun off into a separate entity named Discovery Global.)
Paramount, notably, has not raised its existing $30 per share, all-cash offer for the entire company, including CNN.
However, the new “enhancements,” as Ellison termed them in a statement, are intended to grant WBD shareholders “value certainty, a clear regulatory path, and protection against market volatility.”
WBD shares saw a modest increase, around 1%, subsequent to the news. Nevertheless, there is scant tangible evidence to date suggesting that shareholders in sufficient numbers favor Paramount. WBD recently asserted that “over 93%” of its shareholders “reject Paramount’s inferior scheme.”
A special meeting for WBD shareholders is anticipated to take place either in late March or early April.
Netflix Fights Back
Meanwhile, Netflix is intensifying its public relations battle against Paramount’s unwelcome offer.
During an interview on Monday on the Fox Business Network, Netflix’s Chief Global Affairs Officer, Cliff Waugh, issued a warning regarding Paramount’s bid, claiming the firm “has identified $6 billion in synergies in their offer, which is code for $6 billion in job cuts.”
Waugh also addressed concerns concerning the Department of Justice probe into Netflix’s business practices, a matter initially brought to light by The Wall Street Journal.
According to Waugh, such inquiries constitute a “perfectly normal part of the business process” when mergers are being reviewed.
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