Board yet to conclude the Warner Bros. bid war!
According to reports, WBD is likely to reject Paramount Skydance’s hostile bid, despite Larry Ellison’s backing of the latter.
The company, without raising its $30/share offer, has raised its regulatory reverse termination fee in order to match Netflix by extending its tender offer deadline.
Although Netflix’s offer is lower than Paramount’s hostile bid, as per the analysts, it offers a clear financial structure with fewer execution risks.
Considering the terms of that agreement, it is clear that WB could face a $2.8 bn breakup fee if it walks away from Netflix’s deal.
As per WB’s 5th largest investor, Harris Oakmark, with 96 million shares, the revised offer wasn’t sufficient and couldn’t cover the breakup fee, but as per Thomas Poehling, with 484,000 shares of Warner Bros and 639,000 of Paramount, if Netflix doesn’t counter, as Paramount’s got a better chance in negotiating with the regulators.
As a merged entity, Paramount-Warner Bros., could overtake industry leader Disney and merge Paramount’s television operations with Warner Bros Discovery’s television operations.
Paramount has argued that its offer is more market-proof than Netflix’s market-oriented deal, whose value fluctuates with Netflix’s share price.
Lawmakers have raised concerns regarding the media industry on this WBD deal, no matter who wins, and the deal even has the U.S. President Donald Trump comment publicly on the deal.
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