Key Takeaways
- Paramount Skydance has increased its acquisition proposal for Warner Bros. Discovery to over $31 per share, surpassing Netflix’s existing $27.75 offer
- The WBD board will evaluate this enhanced proposal before Tuesday’s market opening, though it currently endorses the Netflix transaction
- Should WBD’s board determine Paramount’s proposal is superior, Netflix will receive a four-day window to submit a counter-offer
- David Ellison, Paramount’s CEO, has declared the company’s unwavering commitment to securing this acquisition
- Financial backing for Paramount’s bid includes Oracle founder Larry Ellison, RedBird Capital, and Middle Eastern sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi
Paramount Skydance has delivered an enhanced acquisition proposal for WBD, exceeding its earlier all-cash $30-per-share submission. Bloomberg broke the story through confidential sources, though complete deal terms remain undisclosed.
Warner Bros. Discovery, Inc., WBD
The revised proposal is anticipated to surpass $31 per share. Paramount submitted this improved bid within its seven-day negotiation period, which concluded Monday, February 23.
According to Variety, WBD plans to inform shareholders about its intention to evaluate Paramount’s enhanced offer before Tuesday’s market opening. However, the company’s board continues to officially support the Netflix transaction.
Netflix has committed to purchasing WBD’s studio operations, television divisions, and streaming platforms for $27.75 per share in cash. This proposal encompasses Warner’s film production, television content, and HBO assets — but not the entire corporation.
In contrast, Paramount’s proposal targets the complete acquisition of WBD.
Should WBD’s board conclude that Paramount’s revised proposal represents a superior value, Netflix will receive a four-day period to submit a matching or higher offer.
Ellison Remains Determined
Paramount CEO David Ellison has been unambiguous about his objectives. He has publicly declared the company’s relentless pursuit of this acquisition.
On February 10, Ellison modified his proposal to incorporate a quarterly ticking fee structure, a Netflix termination fee, and debt restructuring provisions, while maintaining the $30-per-share valuation. WBD subsequently resumed negotiations with Paramount following verbal assurances from Ellison’s representatives to elevate the offer to $31 or beyond.
Paramount’s acquisition attempt enjoys financial support from Oracle chairman Larry Ellison, private equity investor RedBird Capital, and government investment vehicles from Saudi Arabia, Qatar, and Abu Dhabi.
Political considerations have introduced additional complexity to this already intricate transaction. President Trump intensified tensions over the weekend by publicly calling for Netflix to terminate board member Susan Rice — a former official in both the Obama and Biden administrations — or “face the consequences.”
Legislators and entertainment industry professionals have also voiced apprehensions regarding media consolidation and potential workforce reductions.
Future Outlook for WBD and PSKY
PSKY shares climbed 1.2% during after-hours trading following disclosure of the elevated bid.
Throughout the previous year, PSKY shares have declined 9.5%. TipRanks analysts assign it a Moderate Sell rating, comprised of zero Buy recommendations, one Hold rating, and three Sell ratings. The consensus price target stands at $12.33, suggesting approximately 16.8% potential appreciation from present levels.
A shareholder referendum on the Netflix transaction is presently scheduled for March 20.
Paramount will release Q4 FY2025 financial results after Wednesday’s market close, February 25. Financial analysts project an adjusted loss of $0.01 per share, representing improvement from the $0.11 per share loss during the comparable period last year. Revenue projections stand at $8.15 billion, reflecting 2.1% year-over-year growth.
WBD’s board assessment of Paramount’s enhanced proposal before that earnings announcement could significantly influence market sentiment entering the week.
