Skydance-owned Paramount is again extending the tender offer window in its $77.9 billion hostile takeover bid for Warner Bros. Discovery, while doubling down on a coming proxy fight.
Warner stockholders now have until Feb. 20 to sell their shares to Paramount for $30 apiece in cash — a price that remains unchanged, giving the offer a total enterprise value of over $108 billion including debt. It marks the second extension the company has made since challenging Warner’s merger agreement with Netflix last month.
As of late Wednesday, Paramount said that more than 168.5 million Warner shares had been tendered in support of its offer. But that’s still far below the 50% mark it would need to effectively gain control of Warner — which has about 2.48 billion shares outstanding in series A common stock today.
“Once again, Paramount continues to make the same offer our Board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix,” Warner said in an emailed statement Thursday — adding that it’s “clear our shareholders agree,” as more than 93% have so far rejected “Paramount’s inferior scheme.”
In December, Netflix agreed to buy Warner’s studio and streaming business for $72 billion — now in an all-cash deal that the companies say is more straight forward and will speed up the path to a shareholder vote by April. Including debt, the enterprise value of the deal is about $83 billion, or $27.75 per share.
But Paramount argues its offer is better than Netflix’s and has accused Warner leadership of not being transparent with stockholders. On Thursday, the company claimed Warner’s board was “rushing to solicit shareholder approval” for the Netflix merger, which it said could lead to a lower payout for shareholders if debt spanning from a previously-announced spinoff of Warner’s networks business makes its way to studio and streaming operations.
In an escalation of its hostile bid, Paramount is also moving forward with a proxy fight. Earlier this month, the company announced plans to nominate its own slate of directors to Warner’s board before the next shareholder meeting. And on Thursday, Paramount filed preliminary materials to solicit proxies in opposition to the Netflix merger.
The battle for Warner and the value of each offer grows complicated because Netflix and Paramount want different things. Netflix’s proposed acquisition includes only Warner’s studio and streaming business, including its legacy TV and movie production arms and platforms like HBO Max. But Paramount’s bid is for the entire company — which, beyond studio and streaming, includes its news and cable operations. That would put CNN under the same roof as CBS.
If Netflix is successful, Warner’s current networks would be spun off into their own company called Discovery Global, under a previously-announced separation.
Regardless of who wins the upper hand, a Warner Bros. Discovery sale could be a long, drawn-out process — likely attracting tremendous antitrust scrutiny. Politics are expected to come into play under President Donald Trump, who has made unprecedented suggestions about his personal involvement on whether a deal will go through.
Shares of Warner Bros. Discovery and Netflix both fell slightly Thursday. Shares of Paramount-Skydance rose nearly 3%.
