Warner Bros. Discovery, home to major series such as Game of Thrones, Harry Potter and DC Comics superheroes Batman and Superman, has rejected Paramount Skydance’s latest bid to acquire the company, as a deal with streaming giant Netflix looms.
Warner Bros. on Tuesday rejected Paramount’s $30-per-share bid but remained open to additional offers, giving CBS News’ parent company seven days to make its “best and final offer.”
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“Our board does not determine that your proposal is reasonably likely to result in a transaction that is better than the Netflix merger,” Warner Bros. Chairman Samuel DiPiazza Jr. and CEO David Zaslav said in a letter to Paramount’s board on Tuesday.
Paramount could offer as much as $31 per share, the letter said.
That would allow Netflix to meet the terms of the deal.
“We continue to encourage and remain fully committed to doing business with Netflix,” DiPiazza Jr. said.
Warner Bros. shareholders are scheduled to vote on the proposed Netflix acquisition on March 20th.
Netflix issued a statement saying Warner Bros. shareholders are expected to vote on the merger next month and that the acquisition has reached a milestone.
“While we believe our transaction provides excellent value and certainty, we recognize that PSKY’s antics continue to disrupt WBD shareholders and the broader entertainment industry,” Netflix said, referring to Paramount Skydance.
Paramount said Warner Bros.’ board “never engaged meaningfully” with six different proposals made by executives in the 12 weeks leading up to Warner Bros.’ Dec. 5 announcement of its merger agreement with Netflix.
“This fight has been going on for so long that Paramount is running out of time. It’s not in anyone’s interest,” PP Foresight analyst Paolo Pescatore told Reuters.
Regulatory hurdles
Both deals face major hurdles in Washington, D.C., amid concerns about industry consolidation and the impact on consumers.
In the case of Paramount Skydance, this is driven by possible content changes. CEO David Ellison is said to have promised US President Donald Trump “fundamental changes” to Warner Bros. Discovery’s CNN, which he has long argued has been too critical, The Wall Street Journal reported.
At the same time, Paramount-owned CBS News made several moves seen as an attempt to appease the Trump administration. That includes appointing Bari Weiss, a conservative opinion writer with no television experience, to lead the storied broadcast network. It appointed a former Trump appointee to oversee and address allegations of bias and settled a lawsuit with Trump amid allegations that the network’s newsmagazine program “60 Minutes” fabricated an interview with then-Democratic presidential candidate Kamala Harris.
On Monday, CBS late-night host Stephen Colbert claimed that the network also banned him from airing an interview with Texas Democratic state Rep. James Talarico, who is currently running for the Democratic nomination to represent the state in the U.S. Senate.
“The Donald Trump administration wants to silence people who say bad things about Trump on TV, because all Trump does is watch TV,” Colbert said on The Late Show on Monday.
The Republican-led Federal Communications Commission announced last month that daytime and late-night TV talk shows would no longer be considered “real” news programs and would be exempted from equal-time rules that require them to give airtime to opposing candidates.
The Warner Bros.-Paramount merger would “bring CNN and CBS under the same parent company, along with dozens of other television stations. That combination raises serious concerns about what kind of content we’ll see on more traditional TV formats going forward,” Lee Hepner, senior general counsel at the American Economic Liberties Project, an economic think tank, told Al Jazeera.
Paramount’s revised proposal, which included a personal guarantee from Oracle founder Larry Ellison, the Paramount CEO’s father, for $40 billion in stock, was rejected in early January. Larry Ellison has been a longtime supporter of Trump.
Congressional leaders have expressed concerns about both agreements.
“Each merger will give another company greater control over the news we see, hear, and consume,” New Jersey Sen. Cory Booker said at a U.S. Senate antitrust subcommittee hearing earlier this month.
Republican Sen. Mike Lee of Utah, who also chairs the committee, told Semaphore in December that he “wouldn’t be surprised if this plan was blocked.”
The Writers Guild raised concerns about the deal with Netflix in December, when the potential merger was first announced.
“The world’s largest streaming company swallowing up one of its biggest competitors is what antitrust laws are designed to prevent,” the guild said in a statement. “This merger must be blocked.”
“What I’m seeing in all the excitement surrounding this bidding war is that each party appears to be drastically underestimating the regulatory risk,” Hepner said.
On Wall Street, Paramount Skydance shares soared in midday trading. It has risen 7.4% since the market opened. Netflix also rose slightly by 0.4%, and Warner Bros. Discovery rose 3.4%.
