Katarzyna Petru
The media market has just received a strong shock. Not long ago, it seemed that Netflix was the favourite in the race to take over Warner Bros. Discovery. Now the situation is reversing. A new offer from Paramount Skydance could completely change the balance of power.
31 dollars per share. Paramount raises the stakes
Led by David Ellison, Paramount Skydance has proposed 31 dollars per share for Warner Bros. Discovery, which is clearly more than Netflix's earlier offer of 27.75 USD per share. But that's not all. The offer also includes: an additional 0.25 USD quarterly per share, a regulatory fee of 7 billion USD, 2.8 billion USD in compensation to Netflix if its proposal is rejected. This structured offer can be formally recognised by the WBD board as a so-called “Company's Superior Offer”, paving the way for further negotiations with Paramount.
What does this decision mean for the market?
The potential acquisition of Warner Bros. Discovery by Paramount could shuffle the forces in global streaming. We're talking about a catalogue that includes brands like HBO, DC, and Warner Bros. Pictures. On the other hand, an acquisition by Netflix would mean further consolidation of the market around one of the largest players. Therefore, the decision by WBD's management carries not just financial, but also strategic significance.
Paramount Skydance unexpectedly outbid Netflix and introduced new tension into the sale process of Warner Bros. Discovery. A higher price per share, billion-dollar securities, and a short response time put Netflix in a more difficult position than just a moment ago. The coming days could determine the future of one of the largest media conglomerates in the world.
Source: Bloomberg
