Warner Bros Discovery has confirmed receipt of a revised offer from would-be buyer Paramount which it’s “reviewing in consultation with our financial and legal advisors”.
Details of the revised terms – which are expected to include Paramount increasing its offer from $30 per share – have not yet been published.
Paramount has been seeking to buy its rival since last year, making a series of initially unsolicited offers – each of which were rejected the WBD board.
Then, in December, WBD accepted Netflix’s $82.7 billion ($27.75 per share) offer to buy its studio and streaming business, leaving shareholders with ownership of a separate business based around WBD’s portfolio of linear channels.
News of the Netflix deal, which is subject to approval by shareholders, resulted in Paramount launching a bid to buy to the business directly from WBD’s shareholders while also seeking to portray its offer as more lucrative and certain than its rival’s.
This pressure eventually led to Netflix simplifying its offer, moving from a cash and stock deal to an all-cash structure.
Paramount then moved to sweeten its own bid, offering to fund a $2.8bn termination fee WBD would have to pay if it walked away from the Netflix deal, and pledging to pay shareholders additional money for every quarter that the deal hasn’t closed beyond December 31st.
Reacting to pressure from investors, WDB agreed to enter talks with Paramount in order to give the studio a chance to set out its “best and final offer” by a deadline of midnight Monday (23rd February).
In a statement issued on Tuesday morning, Warner Bros said: “Following engagement with PSKY during the seven-day limited waiver period, we received a revised PSKY proposal to acquire WBD, which we are reviewing in consultation with our financial and legal advisors.
“We will update our shareholders following the Board’s review. The Netflix merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction.
“WBD shareholders are advised not to take any action at this time with respect to the amended PSKY tender offer.”
Under the terms of its deal with the WBD board, Netflix has the right to match any rival offer within 4 days.
Parallel to the bidding, representatives from both suitors have been meeting lawmakers and competition chiefs in major markets in a bid to reassure them about the impact of the deal on customers and the wider entertainment market.
Filmmakers, unions, cinema owners and politicians have all raised concerns about the sale of Warner Bros Discovery, with some warning that the Netflix deal risks creating a company so large that it’s impossible to compete with.
Netflix has played down such concerns, repeatedly insisting that it not only competes with services such as Paramount+ and Apple TV, but also with free services such as YouTube for viewers.
Senior figures at the streamer have also sought to backtrack on years of comments calling into question the longevity or attractiveness of cinema as a means of film distribution.