Katarzyna Petru
The media market has just received a powerful jolt. Until recently, it seemed that Netflix was the favourite in the battle for the acquisition of Warner Bros. Discovery. Now the situation is reversing. A new offer from Paramount Skydance may completely change the balance of power.
31 dollars per share. Paramount raises the stakes
Led by David Ellison, Paramount Skydance has offered 31 dollars per share for Warner Bros. Discovery, which is clearly more than Netflix's earlier offer of 27.75 USD per share. However, 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 compensation for Netflix in case its proposal is rejected. Structured this way, the offer may 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 reshuffle the forces in global streaming. After all, we're talking about a catalogue that includes brands such as HBO, DC, and Warner Bros. Pictures. Meanwhile, an acquisition by Netflix would signify further consolidation of the market around one of the largest players. Therefore, the decision of the WBD board holds significance not only financially but also strategically.
Paramount Skydance unexpectedly outbid Netflix and introduced new tension into the sale process of Warner Bros. Discovery. A higher price per share, billion-dollar guarantees, and a short response time place 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
