The board of Warner Bros. Discovery said Thursday it has determined that the latest offer from Paramount Skydance is a “superior proposal” to its existing pact with Netflix. The move sets off a four-day clock for Netflix to make a counteroffer to the nearly $83 billion deal that it reached with WBD in early December.
In a statement Thursday, WBD stated, “WBD has notified Netflix of its determination that the PSKY proposal constitutes a “Company Superior Proposal.” Under the terms of the Netflix merger agreement, this notice triggers a four business day period during which Netflix has the right to propose revisions to the Netflix merger agreement so that the PSKY proposal would cease to constitute a “Company Superior Proposal.” Following the conclusion of this period, if the Board determines in good faith, after consultation with its independent financial and legal advisors, that, after considering any revisions to the terms of the Netflix merger agreement proposed by Netflix, the PSKY proposal continues to constitute a “Company Superior Proposal,” WBD would be entitled to terminate the Netflix merger agreement.”
Netflix has four business days to come up with a new proposal to salvage the deal. Netflix co-CEO Ted Sarandos is believed to be in Washington, D.C. today in an effort to lobby Trump administration officials on the deal. Amid the fractious national political environment, the Netflix-WBD deal has become a lightning rod for critics. The Justice Department has embarked on a regulatory review that promises to probe all aspects of Netflix’s business, exposing the streaming giant to more scrutiny in D.C. that it has ever faced before.
In its statement, Warner Bros. listed the elements of the revised Paramount Skydance bid that turned the tables.
“PSKY’s proposal includes a purchase price of $31.00 per WBD share in cash, plus a daily ticking fee equal to $0.25 per share per quarter beginning after September 30, 2026, as well as a $7 billion regulatory termination fee payable by PSKY in the event the transaction does not close due to regulatory matters, payment by PSKY of the $2.8 billion termination fee that WBD would be required to pay to Netflix to terminate the existing Netflix merger agreement, an obligation of Larry J. Ellison and an associated trust to contribute additional equity funding to the extent needed to support the solvency certificate required by PSKY’s lending banks, and a ‘Company Material Adverse Effect’ definition that excludes the performance of WBD’s Global Linear Networks segment,” the company said.
More to come