Warner Bros. Discovery (WBD) responded Tuesday evening to the latest improved buyout offer from Paramount Skydance (PSKY), saying that Paramount’s bid “could reasonably be expected to lead to a ‘Company Superior Proposal'” as defined in its existing merger agreement with Netflix (NFLX).
The revised proposal from Paramount Skydance (PSKY) brings the purchase price to $31 per WBD share in cash, as well as a daily ticking fee equivalent to $0.25 per quarter starting after Sept. 30.
The new offer also includes a $7B “regulatory termination fee” payable by Paramount if the transaction doesn’t close due to regulatory matters, as well as payment of the $2.8B termination fee that would be due to Netflix (NFLX); a promise to offer additional equity funding to back a solvency certificate; and a tightened adverse-effect definition that excludes WBD’s linear TV business.
After hours, Warner Bros. Discovery stock (WBD) was -0.9%; Paramount Skydance (PSKY) was +1%, and Netflix (NFLX) +0.7%.
“The Board has not made a determination as to whether the revised PSKY proposal is superior to the merger with Netflix,” WBD said, noting it would engage further to see if a “Company Superior Proposal” can be reached. In that case, Netflix would have four business days to negotiate and propose any revisions to its transaction.
WBD is currently scheduled to hold a special meeting to vote on the Netflix transaction on March 20.