Warner Bros. Discovery said on Tuesday that it will restart the deal talks with Paramount Skydance that it ended in December, giving the company another chance at besting Netflix for a deal. Paramount will have until Feb. 23 to negotiate its best and final offer.
Warner Bros. Discovery last year rejected Paramount’s offer to buy the entire company for $108 billion in favor of a deal to sell only its streaming and studios business to Netflix for $83 billion. Warner Bros. Discovery said at the time that Netflix offered the better deal for shareholders. Paramount disagreed and quickly made its case to shareholders through a hostile bid.
In the roughly two months since then, Paramount has amended its offer twice, each time addressing some of the concerns raised by Warner Bros. Discovery’s board. Paramount’s chief executive, David Ellison, has also raised questions about the Netflix bid, including whether its deal can pass regulatory scrutiny.
Paramount has not publicly raised its offer from $30 a share. Last week, Warner Bros. Discovery said that a senior representative for Paramount had verbally informed a company board member that, if the board authorized talks with Paramount, it would agree to pay $31 a share.
In that conversation, the Paramount representative added that it would be willing to further improve its offer.
In a letter to the Paramount board on Tuesday, David Zaslav, the chief executive of Warner Bros. Discovery, and Samuel A. DiPiazza Jr., the company’s chair, said “we welcome the opportunity to engage with you and expeditiously determine whether PSKY can deliver an actionable, binding proposal that provides superior value.”
According to the terms of Warner Bros. Discovery’s contract with Netflix, it can engage in talks with a rival bidder if it thinks it can lead to a “reasonably superior offer.” Warner Bros. Discovery said in its letter on Tuesday it does not yet think that Paramount’s offer meets that bar — but that Netflix has given Warner Bros. Discovery a seven-day waiver to see if it can clarify a number of questions it has about Paramount’s bid.
“Throughout the robust and highly competitive strategic review process, Netflix has consistently taken a constructive, responsive approach with WBD, in stark contrast to Paramount Skydance,” Netflix said in a statement released on Tuesday. “While we are confident that our transaction provides superior value and certainty, we recognize the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY’s antics.”
If Paramount makes a superior offer, Netflix has the right to improve its own bid. Warner Bros. Discovery announced on Tuesday that it has scheduled a shareholder vote on Netflix’s offer for March 20.
Lauren Hirsch is a Times reporter who covers deals and dealmakers in Wall Street and Washington.
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