Paramount Extends Deadline on Warner Bros Bid to February 20

Paramount has extended the deadline for its bid to acquire Warner Bros Discovery, pushing it to February 20. This decision aims to strengthen its case against Netflix’s competing offer for the studio. As of the original deadline on January 21, only 168.5 million shares, or 6.8% of Warner Bros’ outstanding stock, had been tendered.

Details of the Bidding War

Paramount’s offer, valued at $108.4 billion, equates to $30 per share. However, the company did not increase its bid with this extension. In contrast, Netflix recently revised its own all-cash offer to $82.7 billion, proposing $27.75 per share for Warner Bros’ assets. This adjustment was made to enhance investor confidence amidst concerns regarding previous stock-and-cash negotiations.

Significance of the Acquisition

A successful acquisition would dramatically transform the Hollywood landscape, granting ownership of major franchises like *Friends* and *Batman*, as well as the HBO Max streaming service. Paramount aims to persuade Warner Bros shareholders to reject the Netflix bid, arguing it undervalues the company.

• Warner Bros’ board unanimously approved Netflix’s offer.
• Paramount is seeking to sway investors in its favor ahead of a shareholder vote expected by April.

Challenges Ahead

Analysts suggest Paramount needs to increase its bid to rekindle negotiations. The current offer was met with resistance from Warner Bros’ board, which labeled it insufficient. Paramount’s efforts include launching a public relations campaign and even initiating legal action to draw Warner Bros to the negotiation table.

Warner Bros recently pointed out that their valuation of Discovery Global varied significantly, from a low of $1.33 to a high of $6.86 per share, depending on future deals. Paramount contended that selling Warner Bros to Netflix would involve complex debt transfers that could limit actual profit for shareholders.

The upcoming months will determine the outcome of this highly competitive bidding war. Paramount has emphasized that it can achieve regulatory approval more smoothly compared to Netflix. Both companies are navigating an intricate landscape, facing not only investor sentiments but also potential regulatory hurdles.

Market Reactions

Following the news, shares of Paramount saw a slight increase of 0.6%, while Netflix and Warner Bros experienced declines of 1.2% and minor fluctuations, respectively. Industry observers remain watchful as the situation develops, anticipating the shareholder vote that will ultimately shape the future of these media giants.