Paramount’s Sweetened Warner Bros. Offer won’t Cut It

Paramount Skydance’s sweetened offer for Warner Bros. Discovery seems unlikely to shift the takeover battle in its favor away from Netflix, mostly because it doesn’t raise the purchase price.

Paramount’s offer is for the whole company, and it says the cable channels would have no equity value. (Photo: Paramount Group)

Warner shareholders have repeatedly signaled that they want more than $30 a share to break the existing agreement with Netflix, Angela Palumbo, George Glover and Liz Moyer reported for Barron’s Daily.

Paramount’s new $30-a-share offer includes an extra fee payable to Warner shareholders for each quarter its transaction hasn’t closed beyond the end of this year. It amounts to about $650 million in cash each quarter.

Paramount is also offering to cover the $2.8 billion Netflix termination fee.

Warner Bros. said its board will carefully review the offer. Netflix’s $27.75-a-share offer is for the movie and TV studios and HBO Max streaming platform, with the cable channels spun out separately.

Paramount’s offer is for the whole company, and it says the cable channels would have no equity value.

Broadcast media ownership rules were debated at a recent Senate hearing as Nexstar Media Group pushes for its $6.2 billion acquisition of Tenga, a deal that would smash the current 39% national cap on ownership, putting Nexstar’s broadcast reach closer to 80% of American households.

The Federal Communications Commission is considering changing its rules to raise the cap after FCC Chairman Brendan Carr called the existing rules anticompetitive.