Paramount’s latest bid
It was announced two weeks ago that Paramount‘s aggressive counteroffer to buy Warner Bros. would attempt to sweeten the pot with a personal guarantee from Larry Ellison, the father of Paramount’s David Ellison. It was reported that “David Ellison’s father and Oracle founder, Larry Ellison, has agreed to personally backstop the $40.4 billion in equity financing connected to the deal, and he has agreed not to revoke the Ellison family trust or adversely transfer assets in the trust while any deal is pending.”
Additionally, Paramount has upped its termination fee to $5.8 billion, matching Netflix, and extended the end date for the tender offer to Jan. 21, 2026. This would give the Warner shareholders a bit of a lengthier time frame to reconsider their decisions and Paramount may even extend it if they feel the need to.
Warner Bros. responds with another “No”
You can now view the details of this merger and all the drama associated with it on the official website NetflixWBtogether.com. This site has put out a new press release detailing the response to Paramount’s latest bid. In short, Warners still doesn’t find Paramount’s offer to be superior to Netflix’s and the release states,
After a comprehensive and rigorous review process with its independent financial and legal advisors, the WBD Board reaffirmed its conclusion that the transaction with Netflix is in the best interests of WBD stockholders.”
Ted Sarandos and Greg Peters, co-CEOs of Netflix, have also made the statement, “The WBD Board remains fully supportive of and continues to recommend Netflix’s merger agreement, recognizing it as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry. Netflix and Warner Bros. will bring together highly complementary strengths and a shared passion for storytelling. By joining forces, we will offer audiences even more of the series and films they love—at home and in theaters—expand opportunities for creators, and help foster a dynamic, competitive, and thriving entertainment industry.”
Leaving the door open for Paramount?
THR has also reported that Warner Bros. Discovery board chair Samuel Di Piazza Jr. recently appeared on CNBC’s Squawk Box and revealed that the WB could still be open to the idea of Paramount buying them out, but they would need to raise the price that they would pay. Di Piazza would give credit to Paramount, saying their bid with Larry Ellison’s personal guarantee “stepped up to the table,” which gave them “a major change in their position.” However, Di Piazza also said that “he didn’t raise the price.”
Di Piazza also pointed out that WB would have to pay a deal-breaker fee to Netflix of $2.8 billion. He explained, “In the large majority of cases, when an overbidder comes in, they take that break fee and pay it. From our perspective, they’ve got to put something on the table that is compelling and is superior.”
Di Piazza would debunk that the company “didn’t like” Paramount and concluded, “We would be very open to do a transaction with Paramount.”
