Katarzyna Petru
The media market has just received a strong jolt. Not long ago, it seemed that Netflix was the favorite in the race to take over Warner Bros. Discovery. Now the situation is turning around. 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 offered 31 dollars per share for Warner Bros. Discovery, which is clearly more than Netflix's earlier proposal 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 compensation for Netflix in the event of its proposal being rejected. Such a structured offer may be formally recognized by the WBD board as a so-called “Company's Superior Offer,” which paves 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 catalog 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 of WBD's management 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 timeline for a response 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
