Warner Bros gives Paramount a week to make ‘best and final’ offer

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Warner Bros Discovery has told Paramount to make its “best and final offer” for the film and streaming company within seven days, or get out of the way of Netflix’s agreed $83bn deal. 

The deadline is an attempt by the WBD board to force Paramount to either improve its bid or abandon its pursuit following multiple rejections since October. Netflix has granted a weeklong waiver to WBD to hold discussions with Paramount and “fully and finally resolve this matter”.

A person close to the situation called it a “put up or shut up” moment for Paramount, which has made a $108bn hostile bid for the entire company, including the cable TV assets that are not part of the Netflix agreement.  

The attempt to force Paramount’s hand is the latest move in a high-stakes battle for control of Warner Bros, the legendary studio that owns some of the world’s most valuable film and TV properties, from Harry Potter to Friends. 

David Zaslav, WBD chief executive, said in a statement that his company would hold talks for a week to determine if Paramount can address the “deficiencies” in its offer and present “an actionable, binding proposal that provides superior value”. 

Warner also revealed on Tuesday that it would hold a vote on the Netflix deal on March 20. The WBD board said it remained in favour of the Netflix deal and was recommending that shareholders reject the Paramount offer.  

The catalyst was an approach to a WBD executive by a “senior representative” from Paramount, who suggested last week that the company could raise its offer to $31 a share from $30, WBD said in a statement.

The Paramount representative had also said the bid could go higher. But no new offer materialised, according to WBD.

Netflix said that its bid was final during the original negotiations last year. One person familiar with the group’s thinking added that it would “continue to be disciplined” when considering whether it needed to raise its offer to counter any increase from Paramount.

Paramount last week sweetened its $108bn hostile bid for WBD by offering to pay shareholders if regulators delayed completion of the transaction. But it stopped short of raising its offer. The company also cast doubt on Netflix’s ability to win regulatory approval for a WBD acquisition.

Netflix countered on Tuesday that Paramount did not have an “easier or faster path to regulatory approval”. 

“We granted WBD a narrow seven-day waiver of certain obligations under our merger agreement to allow them to engage with [Paramount] to fully and finally resolve this matter,” Netflix said.

It added that Paramount had “repeatedly mischaracterized the regulatory review process by suggesting its proposal will sail through, misleading WBD stockholders about the real risk of their regulatory challenges around the world”.

Paramount last week won an ally in activist investor Ancora Holdings, which took a $200mn position in WBD and came out against the Netflix deal.

Paramount is also in discussions to nominate Pentwater Capital Management, a top Warner Bros Discovery shareholder, to the company’s board as part of its fight for control.