Paramount has cleared a 10-day waiting period after responding to a second request for information from the DOJ around its unsolicited offer for Warner Bros. Discovery.
The company said today that the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Act means “there is no statutory impediment in the U.S. to closing” the acquisition. Paramount, unusually, had moved on regulatory approvals without a deal in hand so there is nothing, in fact, to close on. WBD has agreed to a sale of its assets to Netflix.
In a statement, David Hyman, Netflix’s Chief Legal Officer, objected to Par’s characterization. “Paramount Skydance continues to mislead stockholders and distract from the facts. The facts are that routine HSR milestones do not signal DOJ approval nor that any decision has been made. They have not secured approvals needed to close and they are a long way from doing so.”
Netflix representatives have been warning investors not to confuse the expiration of the Hart-Scott-Rodino waiting period with regulatory clearance, citing examples where DOJ investigations have continued, per a note from analyst firm Guggenheim this week. Last year, Bill Rinner, then a top DOJ antitrust official, warned of mistakenly believing “that expiration of the statutory waiting period constitutes ‘clearance’ or ‘approval’ of a transaction.”
Netflix is in the process of responding to the DOJ’s second request for information, which will be followed by a 30-day waiting period. Deadline understands that the waiting period for all-cash offers like Paramount’s is shorter. Paramount’s chief legal officer is Makan Delrahim, who led the Justice Department’s Antitrust Division in Donald Trump’s first term.
Par has launched a hostile tender offer for $30 a share in cash for all of WBD. The Netflix deal is a mix of cash and stock pegged at $27.75 for Warner Bros. streaming and studio assets. WBD has repeatedly rejected the overtures of the David Ellison company but this past Tuesday the two began seven days of talks giving Paramount an opportunity to address the WBD board’s concerns over its latest offer. Most observers believe Paramount will need to pony up more cash.
Warner Bros. has set a March 20 date for shareholders to vote on the deal with Netflix and on setting the process of spinning out Discovery Global.
The DOJ can still chose to sue to block a deal at any stage. Along with the WBD stockholders and the DOJ, Netflix or Paramount would both require clearances from regulators around the world. The transactions have raised a host of questions and flurries of protest from lawmakers, unions and industry players.
Senate Democrats have threatened an investigation of Paramount as they fired off a letter to CEO David Ellison, seeking information on the company’s contacts with the Trump administration and the president himself over its attempts acquire WBD.
Ted Johnson contributed to this report.
