Warner Bros Discovery says Paramount Skydance’s revised $31-a-share offer is superior to its existing deal with Netflix, giving the streaming giant four business days to respond or walk away from the bidding war for the coveted Hollywood studio.
The high-stakes battle could be in its final stretch after the announcement on Thursday.
Netflix had earlier this month granted Warner Bros a seven-day waiver to seek a “best and final offer” from Paramount for the company.
Pursuant to the terms of the Netflix merger agreement, this notice initiates a four-business-day period during which Netflix may propose revisions to the agreement, Warner Bros said.
Shares of Paramount Skydance were up more than 1.5 per cent in extended trading.
Netflix, which is looking to buy Warner Bros’ streaming and studio businesses, agreed in December to pay $27.75 a share, saying the offer, along with a planned spin-off of Warner Bros’ cable assets, would deliver a greater shareholder value.
The bid partly depends on the debt level of those assets, which would be separately listed as Discovery Global, as well as the company’s equity value once it starts trading.
In its revised bid, Paramount also raised the termination fee it would pay should the deal fail to gain regulatory approval, to $7 billion from $5.8 billion.
With about $9.03 billion in cash and cash equivalents at the end of December, Netflix has ample financial muscle to raise its offer.
Either deal will reshape the power structure of Hollywood by handing the suitor one of the industry’s most-coveted studios and an extensive content library, as well as lucrative entertainment franchises such as Game of Thrones and DC Comics.
Paramount has argued it has a clearer path to US regulatory approval than Netflix and had indicated that if Warner Bros rejects the new bid, it would be ready to launch a board challenge at this year’s annual meeting.
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