TLDR
- A fresh bid from Paramount Skydance for Warner Bros. Discovery now exceeds $31 per share, surpassing the existing Netflix proposal of $27.75
- Warner Bros. Discovery’s board will assess the enhanced proposal before Tuesday’s market opening, though currently backing the Netflix transaction
- Should the board determine Paramount’s proposal superior, Netflix retains a four-day window to submit a competing offer
- David Ellison, Paramount’s CEO, has declared publicly his commitment to securing this acquisition at any cost
- Financial backing comes from Oracle founder Larry Ellison, RedBird Capital, and Middle Eastern sovereign wealth funds
In a bold move to secure Warner Bros. Discovery, Paramount Skydance has delivered an improved all-cash proposal that surpasses its earlier $30-per-share submission. Bloomberg first reported the development through confidential sources, though exact terms remain undisclosed.
Warner Bros. Discovery, Inc., WBD
Industry insiders anticipate the revised proposal will clear $31 per share. The submission arrived before Paramount’s seven-day negotiation period expired on Monday, February 23.
According to Variety, Warner Bros. Discovery plans to inform investors about its evaluation of Paramount’s proposal ahead of Tuesday’s market opening. However, the board continues to officially endorse the pending Netflix transaction.
Netflix previously agreed to purchase WBD’s studio operations, television networks, and streaming platforms for $27.75 per share in an all-cash transaction. The Netflix proposal encompasses Warner’s motion picture, television production, and HBO divisions — but excludes other company assets.
In contrast, Paramount Skydance’s proposal targets the entire Warner Bros. Discovery entity.
Should the WBD board determine that Paramount’s enhanced proposal represents a superior value proposition, Netflix would receive a four-day period to submit a matching or improved counteroffer.
Ellison Won’t Back Down
Paramount CEO David Ellison has been unambiguous about his determination. Public statements from Ellison confirm his unwavering commitment to completing this acquisition.
On February 10, Ellison modified his proposal to incorporate a quarterly ticking fee structure, provisions for a Netflix breakup payment, and debt refinancing arrangements, while maintaining the $30-per-share valuation. Warner Bros. Discovery subsequently resumed negotiations with Paramount following verbal assurances from Ellison’s representatives to increase the offer to $31 or beyond.
The financial consortium supporting Paramount’s bid includes Oracle’s chairman Larry Ellison, private equity player RedBird Capital, and government investment vehicles from Saudi Arabia, Qatar, and Abu Dhabi.
Political dimensions have complicated an already intricate transaction. President Trump intensified the situation over the weekend by publicly calling for Netflix to remove board member Susan Rice — who served in both the Obama and Biden administrations — or face unspecified repercussions.
Concerns about media industry consolidation and potential employment impacts have also been voiced by legislators and creative professionals.
What’s Next for WBD and PSKY
PSKY shares climbed 1.2% during after-hours trading following the announcement of the increased bid.
Throughout the past twelve months, PSKY shares have declined 9.5%. TipRanks analysts assign a Moderate Sell consensus rating, comprising 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.
Shareholders are currently scheduled to vote on the Netflix acquisition proposal on March 20.
Paramount will announce its Q4 FY2025 financial results after Wednesday’s market close on February 25. Analyst expectations call for an adjusted loss of $0.01 per share, representing improvement from the $0.11 per share loss recorded during the comparable prior-year quarter. Revenue projections stand at $8.15 billion, reflecting 2.1% year-over-year growth.
The board’s evaluation of Paramount’s enhanced proposal before that earnings announcement could dramatically alter market sentiment going into the remainder of the week.
