Paramount takes the lead in the bidding war for Warner Bros. Discovery, leaving Netflix with just four days to improve its offer.
Paramount Takes the Lead, Netflix Has Four Days
WBD announced in a statement that it recognizes Paramount’s offer as superior to Netflix’s. According to Paramount CEO David Ellison, the decision was made unanimously.
“We are pleased that the WBD Board has unanimously confirmed that our offer is extremely price-competitive, which translates into greater value for WBD shareholders, certainty and speed in finalizing the transaction,” Ellison announced.
According to the terms of the agreement between WBD and Netflix regarding the acquisition of the company, competitor Paramount now has four days to improve its offer, after which WBD will make a final decision in this matter. Netflix has not yet commented.
Billions of Dollars on the Table: Financial Details of Offers
Paramount offered a purchase price for the entire company at $31 per share ($1 more than previously) and an additional 25 cents for each quarter of delay in finalizing the transaction, counting from October this year. Additionally, the company promised to pay $2.8 billion to cancel the agreement with Netflix and $7 billion in damages if the transaction is blocked by regulators.
The agreement signed by Netflix with WBD provided for the purchase of the company at $27.75 per share, but without the part containing television channels such as CNN, TNT, MTV or Polish TVN. Under the agreement, these channels would remain under the control of the current owners.
Political Background of the Transaction and the Role of Donald Trump
Paramount’s offer concerns the purchase of the entire company and – according to reports – is favored by the Donald Trump administration. Trump himself said that any transaction should lead to a change in the ownership of CNN, which he accuses of bias.
On Wednesday, Republican attorneys general from 11 states also spoke out against Netflix’s acquisition of WBD, who filed with the Department of Justice to block the transaction due to concerns about the monopolization of the streaming platforms sector.
Influence of the Ellison Family and the Future of Media
The head of Paramount Skydance is David Ellison, son of Trump-supporting billionaire Larry Ellison. Since Trump took power, Ellison’s companies have taken control of the Paramount conglomerate, along with CBS, and also form part of the consortium that took control of American TikTok.
In both cases, the owners have been accused of interfering in content in favor of the administration. Meanwhile, Netflix CEO Ted Sarandos was scheduled to visit the White House on Thursday for talks about the transaction. Last week, Trump demanded that the company remove former Obama advisor Susan Rice from the Board of Directors. The reason was Rice’s statement criticizing corporations that “bent the knee” under pressure from the White House.