Netflix Eyes Higher Bid in Warner Bros Battle
Netflix has plenty of cash and may increase its bid to HBO Max owner Warner Bros. Discovery in case competitor Paramount Skydance offers a better offer, two people familiar with the matter say. The possible bidding war highlights the increasing competition among the big players in the media.
There is a strict battle between the two companies over the ownership of the Warner Bros and its huge entertainment portfolio. The portfolio consists of such large franchises like Harry Potter, Game of Thrones, and iconic DC characters like Superman. These are the assets that render the acquisition very strategic to any streaming giant.
Warner Bros is also moving ahead with a shareholder vote at March 20 on a proposal by Netflix. It has however provided Paramount with one week time to present an offer that is more convincing. The move maintains the spirit of competition with the two parties reviewing valuations.
Netflix has provided a price of 27.75 per share that will give the studio and streaming enterprise a value of 82.7 billion. Paramount has responded with a price of 30 per share or 108.4 billion dollars to the whole corporation, including television properties like CNN and HGTV. Netflix and Warner Bros did not make any public comment.
Bidding War Intensifies Ahead of Shareholder Vote
The author of Stranger Things has a considerable degree of flexibility in financial terms and has more than 9 billion of cash reserves as of December 31. This liquidity will allow Netflix to react to any better offer produced by Paramount. Analysts believe that this financial power continues to put Netflix in a good position to negotiate.
Warner Bros. dismissed the recent antagonistic takeover announcement by Paramount but gave it a Monday deadline to give a best and final offer. Paramount had hinted at increasing its offer to 31 per share. The reworked strategy indicates its willingness to win the deal.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said that Netflix seems to be in the driving seat in the meantime. He however cautioned that price may be the ultimate determinant. The regulatory risk and the structure of funding are also prominent issues of the board.
Britzman further stated that the two offers cannot be compared directly. The proposal made by Netflix does not take into consideration all network assets, and this could affect the valuation by shareholders. After all, this might be the case with board confidence which might be more dependent on strategic alignment than on headline numbers.
Paramount Pushes for Superior Proposal
Paramount confirmed it would continue pursuing its tender offer for Warner Bros. The company plans to oppose what it calls the “inferior” Netflix merger. It also intends to nominate directors at the upcoming annual meeting.
Under the merger agreement, Netflix retains the right to match any improved offer. This clause places added pressure on Paramount to submit a significantly stronger bid. Industry observers are closely watching whether a higher offer emerges before the deadline.
Warner Bros Chairman Samuel DiPiazza Jr. and CEO David Zaslav reaffirmed their support for the Netflix transaction. In a letter to Paramount’s board, they stated their continued commitment to the existing merger agreement. The leadership’s stance signals confidence in Netflix’s proposal.
Board Weighs Financing and Regulatory Risks
Experts say Paramount’s persistence indicates it believes victory is still possible. Paren Knadjian of Eisner Advisory Group noted that financing structure and regulatory approvals remain serious hurdles. These factors could weigh heavily in the board’s final decision.
Paramount recently offered additional cash payments to Warner Bros investors for any delays in closing the deal. It also pledged to cover a $2.8 billion breakup fee if Warner Bros withdrew from its agreement with Netflix. Despite these concessions, the board found the proposal insufficient.
Warner Bros in its letter quoted unresolved matters, one of which was the responsibility of a possible 1.5 billion financing fee. Another issue that is still under question is the stability of debt financing and the complete commitment of equity funding spearheaded by Larry Ellison. Such doubts can end up defining the fate of the battle of high stakes media takeover.