Paramount Skydance (PSKY) defended its $77.9B offer for Warner Bros. Discovery (WBD) after the media company rejected Paramount’s bid and planned to move forward with its sale to Netflix (NFLX).
“Paramount’s offer is superior to WBD’s existing agreement with Netflix and represents the best path forward for WBD shareholders,” Paramount said in statement, adding that the Netflix (NFLX) offer “contains multiple uncertain components and has already decreased in value” now worth $27.42 per share, and is “unmistakably inferior” to Paramount’s (PSKY) $30 per share bid.
Under the terms of the agreement announced December 5, Netflix (NFLX) will acquire Warner Bros Discovery (WBD), including its film and television studios, HBO Max, and HBO, in a cash-and-stock transaction valued at $27.75 per WBD share, with a total enterprise value of approximately $82.7 billion (equity value of $72.0 billion).
To bolster its argument of a superior bid for the entire company at $30/share, Paramount (PSKY) argues that the Netflix (NFLX) offer includes a purchase price reduction if WBD decides to “more appropriately” capitalize Discovery Global with less debt. This reduces the proceeds to WBD shareholders. By contrast, Paramount’s (PSKY) bid is “100% cash and definitionally completely certain.”
Therefore, in consideration of the value of its offer, Paramount (PSKY) “urges WBD shareholders to register their preference for Paramount’s offer” by tendering their shares today.
At Thursday’s open, shares of all three entities opened lower.