<\/p>\n
Warner Bros. Discovery is cracking open the door to allow spurned bidder, Paramount Skydance, to make its case \u2014 but Warner\u2019s board still maintains its preference for Netflix\u2019s competing proposal.<\/p>\n
Warner\u2019s move to reopen talks comes after weeks of pressure from Paramount, which submitted an enhanced offer<\/a> to buy Warner last week. Paramount\u2019s willingness to increase its offer late in the auction<\/a> attracted the attention of some Warner investors. <\/p>\n On Tuesday, Warner Bros. Discovery responded with a letter to Paramount Chairman David Ellison and others on Paramount\u2019s board, giving the group seven days to \u201cclarify your proposal.\u201d<\/p>\n \u201cWe seek your best and final proposal,\u201d Warner board members wrote. Warner set a Feb. 23 deadline for Paramount to comply.<\/p>\n The closely watched sale of the century-old Warner Bros., known for \u201cBatman,\u201d \u201cThe Big Bang Theory,\u201d \u201cCasablanca,\u201d and HBO, the home of \u201cGame of Thrones\u201d and \u201cSuccession,\u201d is expected to reshape Hollywood. <\/p>\n The flurry of activity comes as Warner Bros. Discovery and Netflix are seeking to enter the home stretch of the auction. Warner separately issued its proxy and set a special March 20 meeting of its shareholders to decide the company\u2019s fate. <\/p>\n Warner Bros. Discovery is recommending that its stockholders approve the $82.7-billion Netflix deal.<\/p>\n \u201cWe continue to believe the Netflix merger is in the best interests of WBD shareholders due to the tremendous value it provides, our clear path to achieve regulatory approval and the transaction\u2019s protections for shareholders against downside risk,\u201d Warner Chairman Samuel A. Di Piazza, Jr., said in a Tuesday statement. <\/p>\n Still, the maneuver essentially reopens the talks. <\/p>\n Warner Bros. is creating an opportunity for Paramount to sway Warner board members, which could perhaps prompt Netflix to raise its $27.75 a share offer for Warner\u2019s Burbank-based studios<\/a>, vast library of programming, HBO and streaming service HBO Max. <\/p>\n Netflix is not interested in buying Warner Bros. Discovery\u2019s basic cable channels, including celebrity.land<\/a>, TBS, HGTV and Animal Planet, which are set to be spun off to a stand-alone company later this year. <\/p>\n In contrast, Paramount wants to buy the entire company and has offered more than $30 a share. <\/p>\n Last week, Paramount sweetened its bid for Warner, adding a $2.8-billion \u201cbreak fee\u201d that Warner would have to pay Netflix if the company pulled the plug on that deal. Paramount also said it would pay Warner investors a \u201cticking fee\u201d of 25 cents a share for every quarter after Jan. 1 that the deal does not close. <\/p>\n \u201cWhile we have tried to be as constructive as possible in formulating these solutions, several of these items would benefit from collaborative discussion to finalize,\u201d Paramount said last week as it angled for a chance to make its case. \u201cWe will work with you to refine these solutions to ensure they address any and all of your concerns.\u201d<\/p>\n Netflix agreed to give Warner Bros. Discovery a temporary waiver from its merger agreement to allow Warner Bros. Discovery to reengage with Paramount, which lost the bidding war on Dec. 4.<\/p>\n \u201cWe granted WBD a narrow seven-day waiver of certain obligations under our merger agreement to allow them to engage with PSKY to fully and finally resolve this matter,\u201d Netflix said Tuesday in a statement. \u201cThis does not change the fact that we have the only signed, board-recommended Netflix has matching rights for any improved Paramount offer. The company renewed its confidence in its deal and its prospect to win regulatory approval.<\/p>\n \u201cPSKY has 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,\u201d Netflix said in its statement. \u201cWBD stockholders should not be misled into thinking that PSKY has an easier or faster path to regulatory approval \u2013 it does not.\u201d<\/p>\n Warner Bros. Discovery acknowledged that Paramount\u2019s recent modification \u201caddresses some of the concerns that WBD<\/a> had identified several months ago,\u201d according to the letter to Paramount. <\/p>\n
agreement with WBD, and ours is the only certain path to delivering value to WBD\u2019s stockholders.\u201d<\/p>\n