Paramount has officially acknowledged the recent announcement from Warner Bros. Discovery (WBD) regarding the initiation of a week-long negotiation period, commencing on February 23, with support from Netflix. This initiative is aimed at exploring a potential deal between the companies.
In its response, Paramount pointed out that WBD’s decision to provide a seven-day ‘waiver’ for negotiations signifies a deviation from the standard practice under the Netflix merger agreement. Specifically, WBD opted not to determine that Paramount’s superior offer of $30 per share in cash could be expected to yield a better proposal. This decision would have allowed WBD to engage in negotiations without facing a time constraint.
WBD has expressed skepticism regarding the prospect of the discussions between Paramount and Netflix producing a deal that would outshine its current agreement with Netflix. The company continues to endorse the streaming giant, scheduling a special shareholder meeting on March 20 to hold a vote on the proposed merger with Netflix. In its communications, Paramount highlighted WBD’s proxy materials, which provide a range for the consideration Netflix is set to offer its shareholders—between $21.23 and $27.75 in cash per share. WBD described the lower figure as a “hypothetical scenario … which is highly unlikely to occur.”
Paramount has reiterated that its proposal stands at a significantly higher value of $30 per share, with 100% cash and promises a more certain and faster route to closing the transaction. The company also mentioned a previously noted $0.25 per-share, per-quarter ticking fee that would enhance the financial appeal of its offer. While Paramount did not indicate any intention to increase its bid beyond the $30 per share, such a suggestion had previously circulated.
Despite the unconventional nature of WBD’s recent strategies, Paramount conveyed its readiness to engage in “good faith and constructive discussions.” Simultaneously, the company remains committed to advancing its tender offer, maintaining opposition to the perceived inferior Netflix merger, and moving forward with plans to nominate a slate of directors during the upcoming WBD annual meeting.
