Warner Bros Discovery on Monday confirmed receipt of Paramount’s amended, unsolicited tender offer and “consistent with its fiduciary duties and in consultation with its independent financial and legal advisors, will carefully review and consider” it.
Paramount Skydance has offered to acquire all of WBD’s outstanding shares for $30 each in cash. Its sixth and previous bid had been unanimously rebuffed by WBD’s board, which, instead, inked a deal to sell its studio and streaming assets to Netflix after a speedy auction. Paramount took its case directly to shareholders with a hostile tender offer December 8. The amended offer it presented this morning was not higher monetarily but addressed a series of concerns raised by WBD, led by CEO David Zaslav.
“The WBD Board carefully reviewed the December 8 Tender Offer and determined that it provided inadequate value and imposed numerous significant risks and costs on WBD and its stockholders, and did not meet the criteria of a “Superior Proposal” under the Netflix Merger Agreement. The Board is not modifying its recommendation with respect to the Netflix Merger Agreement. Warner Bros. Discovery will review the Amended Tender Offer and advise its stockholders of the Board’s recommendation after the completion of that review,” WBD said.
“Warner Bros. Discovery stockholders are advised not to take any action at this time with respect to the amended Paramount Skydance tender offer.”
WBD shareholders have until January 21 to tender their shares to Paramount under the amended proposal, which now includes a $40.4 billion personal equity financing guarantee by Larry Ellison (the Oracle co-founder and father of Paramount CEO David Ellison); an enhanced $5.8 billion breakup fee; and increased financial flexibility during an interim period.
Par’s previous offer included a financing backstop commitment by the Ellison Family Revocable Trust but not personally by Ellison, a situation that WBD explained in an SEC filing last week that it considered too risky.
In an interview on CNBC today, RedBird Capital founder and managing partner Gerry Cardinale, a partner with the Ellisons in Paramount Skydance, called the trust issue a “red herring that is out there and preventing our offer from getting vetted and taken seriously, so we took it off the table. It is now off the table.”
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