Warner Bros. Discovery (WBD) announced that its board has unanimously determined that Paramount Skydance’s (PSKY) amended tender offer is not in the best interests of the media company and its shareholders. The board unanimously reiterated its recommendation in support of the Netflix (NFLX) combination and recommended that Warner Bros. (WBD) shareholders reject Paramount Skydance’s (PSKY) offer because it does not meet the criteria of a “superior proposal” under the terms of the merger agreement with Netflix (NFLX) announced on December 5.
“The board unanimously determined that the Paramount’s latest offer remains inferior to our merger agreement with Netflix across multiple key areas,” stated Warner Bros. board chair Samuel Di Piazza, Jr. “Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed. Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount’s offer would impose on our shareholders,” he added.
Under the terms of the agreement announced December 5, Netflix (NFLX) will acquire Warner Bros. (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).
Shares of Warner Bros. Discovery (WBD) slipped 0.2% in premarket action to $28.42, while Netflix (NFLX) edged 0.4% higher in the early session.