Warner Bros. Discovery (NASDAQ:WBD) on Tuesday rejected the latest hostile takeover bid from Paramount Skydance (NASDAQ:PSKY), giving the David Ellison-led company until February 23 to submit its “best and final offer.”
This offer can be matched by Netflix Inc. (NASDAQ:NFLX) under the terms of the merger agreement, Warner Bros said in a statement.
In the pre-market trading session on Tuesday, shares of Warner Bros. Discovery and Paramount climbed 2.72%, each, while Netflix was trading 0.70% higher at last check.
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Paramount had informally proposed a higher share price of $31, which seemed to have piqued the interest of the Warner Bros board. However, Warner Bros Chairman Samuel DiPiazza Jr. and CEO David Zaslav clarified in a letter to the Paramount board that their proposal has not been deemed superior to the Netflix merger. They reiterated their commitment to the transaction with Netflix.
This development follows a series of events in the ongoing merger saga. Earlier this month, activist investor Ancora took a stake in Warner Bros and opposed Netflix’s offer as Paramount sweetened its bid for the HBO owner. Paramount’s revised bid included a “ticking fee” payable to its shareholders for any potential delays in receiving regulatory approval for the deal, and a $2.8 billion termination fee payout to Netflix.
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In December, Netflix agreed to buy Warner Bros. studios and HBO Max for $27.75 per share, following WBD’s planned cable network spin-off. Paramount then launched a hostile all-cash bid for the entire company, including CNN and TNT, sparking a high-stakes battle. So far, Warner Bros. Discovery’s board has remained committed to the Netflix deal, citing better value and regulatory clarity, despite Paramount’s push to sway shareholders.
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