Written by Jon Cuthbert
Warner Bros. Discovery (NASDAQ:WBD) confirmed on Monday the receipt of an amended unsolicited tender offer from Paramount Skydance (NASDAQ:PSKY), marking the latest escalation in a high-stakes bidding war for the storied Hollywood studio.
The WBD Board of Directors, supported by independent financial and legal advisors, will evaluate the new proposal against its existing fiduciary duties and the terms of its pending merger agreement with Netflix (NASDAQ:NFLX).
The board previously rejected a December 8 bid from Paramount at the same $30-per-share price point, dismissing it as "inadequate" and failing to meet the "Superior Proposal" criteria required to break its commitment to Netflix.
While the headline price of Paramount’s all-cash offer significantly exceeds the roughly $27.75-per-share value of the Netflix deal, WBD’s leadership has consistently raised concerns over deal certainty and financing.
The Netflix merger includes a complex spin-off of WBD’s Global Networks division—including CNN—into a standalone entity, whereas Paramount’s bid is for the entire company.
In its latest move to address these skepticisms, Paramount Skydance has fortified its bid with an irrevocable $40.4 billion personal guarantee from Oracle co-founder Larry Ellison.
The amended offer also includes a raised regulatory reverse termination fee of $5.8 billion, matching the protections provided in the Netflix agreement.
Despite the strengthened terms, the WBD Board stated it is not currently modifying its recommendation in favor of the Netflix merger and has advised shareholders to take no action.
The company is being advised by a heavy-hitting roster of financial experts including Allen & Company, J.P. Morgan, and Evercore, with legal counsel from Wachtell Lipton, Rosen & Katz and Debevoise & Plimpton.