Warner Bros. is exploring reopening negotiations with hostile bidder Paramount Skydance after receiving an improved takeover bid, people familiar with the matter said. Warner Bros.’s board is discussing whether Paramount’s revised offer might provide a path to a better deal, people familiar with the board’s thinking said.
That could spark a second-round bidding war with Netflix. The board has not decided how to respond and Warner Bros. still has a binding agreement with Netflix, people familiar with the matter said.
Paramount submitted revised terms of the offer last week that addressed several concerns, people familiar with the matter said. Paramount said that if Warner Bros. terminates its deal with Netflix, the company is willing to pay a termination fee of US$2.8 billion and offers to provide bottom-line support for Warner Bros.'s debt refinancing. Paramount also said it would compensate Warner Bros. shareholders if the deal is not completed by December 31, highlighting its confidence that the deal can quickly obtain regulatory approval.
While Warner Bros. still has some concerns about Paramount's bid, it's the first time the company's board has considered whether Paramount's offer could lead to a better deal and could prompt Netflix to raise its bid. Warner Bros. is also facing pressure from shareholders to at least engage with Paramount.
Warner Bros. has previously agreed to sell the studio and HBO Max streaming business to Netflix for $27.75 per share.