Shares of Netflix rose more than 5% in trading Wednesday in the aftermath of Warner Bros. Discovery revealing it had received what could be a competitive offer for the company from Paramount Skydance that might leave the streaming giant mulling whether to continue its pursuit.
Netflix shares stood at $82.23 per share in trading early Wednesday afternoon, up 5.37%, or $4.18, from the day-earlier close of $78.04. Volume stood around 35 million. Average volume is 46.2 million.
Warner late Tuesday said it had received a revised bid from Paramount Skydance of $31 per share that could “reasonably be expected” to lead to a “superior proposal” to the deal Netflix already has in place.W
Warner already has a pact to sell its HBO Max streamer and its studios to Netflix in a transaction valued at around $83 billion.
Warner’s board “has not made a determination” as to whether the revised proposal is “superior” to the merger agreement in place with Netflix, the company said in a statement, and Warner “will engage further” with Paramount to determine if a “company superior proposal” — a term defined within the language of its existing Netflix pact — can be reached. If the board finds such a deal has been received, Warner Bros. Discovery says Netflix will “have four business days after such determination to negotiate with WBD and to propose any revisions to the Netflix transaction.”
Paramount proposed increasing its purchase price for all of Warner to $31 a share in cash, and accelerating the disbursement of a so-called “ticking fee” that would start to accumulate after September 30 of this year until the deal is approved and consummated. Previously, Paramount had proposed starting that fee in January of next year.
Paramount has already said it will pay a $2.8 billion termination fee which Warner would owe Netflix to terminate its current merger deal merger agreement.