Paramount makes higher offer in competitive bid for historic Hollywood studio previously owned by Warner Bros.

Warner Bros. Discovery is currently evaluating a revamped takeover offer from Paramount. The proposal now includes a price increase to per share, up from the previous offer of per share made in December, when Paramount first initiated a hostile bid following Warner’s strategic partnership with Netflix. In addition to the elevated share price, Paramount has also raised its regulatory termination fee to billion, which would be payable should the acquisition not proceed as planned.

Initially, Paramount’s .9 billion bid sought to acquire Warner Bros. in its entirety, encompassing not only its film and streaming assets but also networks like CNN and Discovery. This offer was characterized as all-cash and, when factoring in debt, valued Warner investors at per share, resulting in an enterprise value of roughly 8 billion. Paramount remains firm that its offer is still on the table as Warner contemplates this latest revision.

In contrast, Netflix is aiming to acquire only Warner’s studio and streaming segments for billion in cash, equating to about billion when debt is considered. Warner’s board has actively endorsed this deal and is preparing for a shareholder vote scheduled for March 20, indicating their preference for Netflix’s proposal at this time.

If Warner’s board shifts its stance to view Paramount’s updated offer as more desirable, Netflix would have the opportunity to revise its own proposal, potentially igniting a competitive bidding scenario. This back-and-forth between Paramount and Netflix has raised concerns among industry stakeholders about potential consolidation’s impact on diversity in filmmaking and job preservation within the industry. Critics warn that either acquisition could affect consumer choices, particularly in light of evolving streaming costs.

Regulatory scrutiny is anticipated, with the U.S. Department of Justice and international bodies likely to investigate antitrust implications. Paramount contends that acquiring Warner would enhance consumer options, while Netflix emphasizes its position in a competitive landscape that includes other video distribution platforms like YouTube.

The political context complicates the situation, as discussions around these corporate maneuvers have surfaced in broader public and political discourse. Paramount’s bid is backed by significant industry players, including Oracle’s Larry Ellison, while past comments from former President Donald Trump regarding the deal further added to the narrative surrounding this potential acquisition.

As Warner Bros. Discovery assesses these competing offers, the future of its assets hangs in a delicate balance, with implications that could significantly alter the dynamics of the media landscape.