Warner Bros Considers Resuming Sale Talks with Paramount, Reports Bloomberg News
Warner Bros Discovery (WBD) is contemplating reopening sale discussions with Paramount Skydance following an enhanced offer, according to a report by Bloomberg News. The board of Warner Bros is evaluating whether Paramount presents a more favorable deal compared to its ongoing agreement with Netflix.
Current Offers and Implications
Paramount Skydance’s recent proposal includes increased financial incentives for Warner Bros shareholders. This revised offer comes after Warner Bros originally planned to proceed with Netflix, which has been in negotiations for distribution rights.
Details of the Paramount Offer
As part of its amended bid, Paramount is offering a 25-cent-per-share quarterly “ticking fee” for shareholders. This fee amounts to approximately $650 million, beginning in 2027. Additionally, Paramount has agreed to cover the $2.8 billion breakup fee that Warner Bros would incur if it disengages from Netflix.
- Current Paramount offer: $30 per share, valuing the deal at $108.4 billion including debt.
- Quarterly ticking fee: $0.25 starting in 2027.
- Breakup fee: $2.8 billion covered by Paramount.
Strategic Considerations and Market Competition
Warner Bros possesses a substantial content library and popular franchises such as “Game of Thrones” and “Harry Potter.” Both Netflix and Paramount have expressed strong interest in acquiring Warner Bros for its premier film and television studios.
Ancora Holdings, an activist investor with a significant stake worth nearly $200 million, has recently announced its intention to oppose the Netflix deal. They argue that Warner Bros management has not seriously considered Paramount’s bid, which includes attractive cable assets such as CNN and TNT.
Next Steps for Warner Bros
The Warner Bros board has yet to finalize a decision regarding the proposed offers. They may choose to prioritize the ongoing Netflix arrangement or explore the potential of a deal with Paramount, which could reshape the competitive landscape in the entertainment industry.
