Credit: Hannah Wernecke via Unsplash
Paramount Skydance has extended its $30-per-share all-cash tender offer for Warner Bros. Discovery to February 20 while filing proxy materials urging WBD shareholders to reject the media company's proposed Netflix merger.
The dual move marks an escalation in the bidding war, with Paramount claiming Netflix's offer delivers less cash than advertised and faces regulatory hurdles that would concentrate streaming market power.
Paramount argues WBD shareholders will receive $27.75 per share from Netflix, potentially dropping to $23.20 depending on how debt is allocated to the spun-off Discovery Global business.
WBD's own financial advisors valued Discovery Global equity as low as $0.72 per share.
Paramount accuses WBD of seeking shareholder approval without disclosing Discovery Global's capital structure and financials, despite this directly determining what shareholders receive.
"WBD stockholders will not know or be able to determine the specific Merger Consideration that will be paid to WBD stockholders upon consummation of the (Netflix) merger," Paramount said, quoting WBD's own filing.
The company claims the Netflix deal would give the streaming giant 43% of global subscription video-on-demand subscribers, reducing competition and harming content creators and cinema operators.
Regulatory approval faces particular challenges in Europe, where Netflix dominates and HBO Max is its only viable international competitor.
Paramount also alleges WBD's board was publicly defending the prior Netflix deal while negotiating a new merger agreement, and refused to engage with Paramount after reopening Netflix talks.
Paramount's $108.4 billion enterprise value offer compares to Netflix's $82.7 billion proposal.
As of January 21, 168.5 million WBD shares had been tendered to Paramount's offer.
The move comes after Warner Bros. Discovery board advised shareholders to reject an amended takeover offer of $US108.4 billion from Paramount Skydance earlier this month.
And less than a fortnight after Paramount CEO David Ellison told shareholders the company will nominate a slate of directors who would engage with Paramount's $30 per share cash offer and enter into a transaction.
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