By Amy-Jo Crowley and Milana Vinn
Feb 19 (Reuters) – Netflix has ample cash and could bump up its offer for HBO Max owner Warner Bros Discovery if competing bidder Paramount Skydance increases its own offer, two people with knowledge of the matter said.
The two media giants have been locked in a heated rivalry over Warner Bros and its storied catalogue, which includes iconic franchises like “Harry Potter”, “Game of Thrones”, DC Comics and Superman.
Though Warner Bros is moving forward with a March 20 shareholder vote on Netflix’s offer, it has given Paramount a week to come up with a more compelling bid.
Netflix has bid $27.75 a share, or $82.7 billion, for Warner Bros’ studio and streaming businesses while Paramount has offered $30 a share, or $108.4 billion, for the whole company, which includes Discovery Global that houses CNN, HGTV and other TV assets.
Netflix and Warner Bros declined to comment.
The creator of “Stranger Things” is sitting on a lot of dry powder that gives it some flexibility to up the ante, the people said, holding about $9.03 billion in cash and cash equivalents on its balance sheet as of December 31.
MONDAY DEADLINE
Warner Bros rejected Paramount’s latest hostile takeover bid on Tuesday but gave the rival studio until the end of Monday to submit a “best and final” offer. Paramount enticed the board to the table after informally broaching a $31 per share offer, Warner Bros said.
“Netflix still looks to be in the driving seat, but that can quickly shift,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown. “Price will likely be the deciding factor — Warner’s concerns around funding and regulatory risk are real, but at a high enough number, they become secondary.”
Britzman expects Netflix will counter any improved offer from Paramount. “But the real twist is that these deals were never apples‑to‑apples, and it may ultimately come down to how much value the board and shareholders assign to the network business that Netflix would leave behind,” he said.
Paramount said it would continue to push the tender offer it has launched for the studio, oppose the “inferior” Netflix merger and still plans to nominate directors for the upcoming Warner Bros annual meeting.
All eyes are now on whether the CBS-parent improves its offer, which Netflix is allowed to match under the terms of the merger agreement, according to Warner Bros.
Warner Bros Chairman Samuel DiPiazza Jr. and CEO David Zaslav said in a letter sent to the Paramount board on Tuesday that “we continue to recommend and remain fully committed to our transaction with Netflix”.
