Contents
Key Takeaways
- Paramount Skydance has increased its acquisition proposal for WBD beyond $30 per share, potentially reaching $31+
- The board will evaluate the enhanced proposal while maintaining its recommendation of Netflix’s $27.75-per-share agreement
- Should the board determine Paramount’s proposal is superior, Netflix retains a four-day period to submit a counteroffer
- David Ellison, Paramount’s CEO, has made clear statements about his determination to secure the acquisition
- Shareholders are set to vote on the Netflix transaction on March 20
The battle for Warner Bros. Discovery has intensified as Paramount Skydance submits an enhanced takeover proposal, marking a significant escalation in this high-profile media industry showdown.
Warner Bros. Discovery, Inc., WBD
Paramount’s latest proposal surpasses its earlier all-cash submission of $30 per share. Sources informed Bloomberg about the development, though specific details of the revised terms have not been publicly disclosed. The submission arrived before the conclusion of Paramount’s seven-day negotiation period on Monday, February 23.
Variety indicates the updated proposal is anticipated to surpass the $31-per-share threshold. WBD plans to notify its shareholders about its intention to evaluate Paramount’s enhanced proposal before Tuesday’s market opening — though the company continues to officially endorse the Netflix transaction.
Netflix has arranged to purchase WBD’s entertainment properties, including film, television, and HBO divisions, at $27.75 per share in an all-cash transaction. Paramount’s proposal encompasses the entirety of WBD.
Should WBD’s board conclude that Paramount’s proposal represents a superior value, Netflix will have a four-day window to respond with an improved offer.
Ellison Maintains Aggressive Stance
Paramount CEO David Ellison has been unambiguous in his messaging: the company remains committed to securing this acquisition.
On February 10, Ellison modified his proposal to incorporate a quarterly ticking fee, provisions for a Netflix breakup fee, and coverage for debt refinancing expenses — all while maintaining the $30-per-share valuation. WBD subsequently resumed discussions after receiving verbal assurances from Ellison’s representatives to elevate the bid to $31 or higher.
The Paramount proposal benefits from financial backing by Oracle chairman Larry Ellison, RedBird Capital, and sovereign wealth entities from Saudi Arabia, Qatar, and Abu Dhabi.
Political Dynamics Influence Deal
The transaction has attracted scrutiny beyond the financial sector. Members of Congress and industry professionals have voiced concerns regarding media industry consolidation and potential employment impacts.
President Trump intensified the situation during the weekend by publicly calling for Netflix to remove board member Susan Rice — who previously held positions in the Obama and Biden administrations — or “face the consequences.”
Market Response and Next Steps
PSKY shares climbed 1.2% during after-hours trading following the announcement of the elevated bid.
The shareholder vote concerning the Netflix transaction remains on the calendar for March 20. A board determination to seriously consider Paramount’s enhanced proposal could disrupt that schedule.
Paramount is scheduled to release its Q4 FY2025 financial results after Wednesday’s market close on February 25. Analyst consensus projects an adjusted loss of $0.01 per share compared to a $0.11 loss in the prior-year period, while revenue is forecast at $8.15 billion, representing a 2.1% year-over-year increase.
Wall Street analysts on TipRanks assign PSKY a Moderate Sell rating — featuring zero Buy recommendations, one Hold rating, and three Sell ratings — with a consensus price target of $12.33.
