Fight For Warner Bros Explained: Netflix Vs Paramount - Who Is Offering What?

Paramount Skydance on Monday launched a hostile $108.4 billion bid for Warner Bros Discovery, trying to beat Netflix’s earlier $72 billion deal. 

Earlier, it appeared that Netflix had almost won the weeks-long bidding war for Warner Bros Discovery's TV, film and streaming assets. Paramount’s new move means the battle for control of Warner Bros is likely to continue for a while.

The company said it made six proposals in 12 weeks, but Warner Bros “never engaged meaningfully.” Paramount also sent a letter accusing Warner Bros of abandoning a fair process and favouring Netflix.

The Warner Bros Discovery board said it would review Paramount’s bid, but is keeping its recommendation for Netflix, according to Reuters.

Paramount is offering $30 per share in cash for all of Warner Bros Discovery, with financing from Affinity Partners, the investment firm run by Jared Kushner, US President Donald Trump's son-in-law. The financing also includes contributions from several Middle Eastern sovereign funds, like the Saudi and Qatari sovereign wealth funds.

It argues its bid is stronger than Netflix’s because it provides $18 billion more in cash and should face fewer regulatory hurdles. Unlike Netflix’s bid, which covers only the Warner Bros studios, HBO and HBO Max, Paramount’s offer includes all of Warner Bros Discovery’s cable networks as well.

Netflix’s latest offer values Warner Bros Discovery at $72 billion in equity, agreeing to buy its TV, film and streaming businesses for $27.75 per share. Under the agreement, Warner Bros Discovery shareholders will receive $23.25 in cash and about $4.50 in Netflix stock per share. The deal also values the company at $82.7 billion, including debt and represents a 121% premium to Warner Bros Discovery’s share price before news of a potential sale first surfaced on Sept. 10.

Netflix has agreed to pay $5.8 billion in breakup fees if it walks away from the Warner Bros Discovery deal. Meanwhile, Warner Bros Discovery would owe Netflix $2.8 billion if it backs out. Now, it remains to be seen whether Netflix can secure a final agreement or Paramount’s offer will upend the deal.