Paramount Skydance ‘reaffirms’ existing WBD offer

Paramount Skydance is sticking to its $30-per-share takeover proposal for the entirety of Warner Bros Discovery (WBD).

The move comes a day after WBD’s board urged its investors to reject Paramount Skydance’s latest offer made on 8 December, describing it as “inferior” to Netflix’s $27.75 cash and stock proposal for WBD’s studio and streaming assets.

WBD’s chair Samuel A Di Piazza Jr yesterday said on CNBC that the company would consider exploring a revised Paramount Skydance offer if it was “compelling and superior” to that of Netflix.

An improved proposal from Ellison now looks unlikely, however, after Paramount Skydance said that it was reaffirming its $30 all-cash offer to acquire all of WBD.

Paramount Skydance said it noted WBD’s decision “not to engage” on its latest offer and reiterated its belief that its proposal remains “superior to WBD’s existing agreement with Netflix” and provides “the best path forward” for the HBO owner’s shareholders.

The David Ellison-led company added that it had addressed ”every issue raised” in WBD’s concerns over its proposal, including offering a $40bn (£29.9bn) personal guarantee in December from Oracle founder Larry Ellison aimed at mitigating WBD concerns around financing.

It also said debt financing from Bank of America, Citibank and Apollo Capital Management ”remains in full force and effect” to support its bid, adding that Paramount “would welcome the opportunity to engage directly with the WBD board to discuss the offer and address the board’s latest claims.”

Paramount also pointed to Netflix’s share price, which has fallen around 7% over the past month, as reducing the appeal of the global streamer’s deal, which it claims now stands at $27.42 rather than the original $27.75 offer as result of the decline.

The studio also again disputed the value placed on Discovery Global, the cable off-shoot that is not being acquired by Netflix, highlighting the travails of NBC Universal’s recently spun-off cable operation Versant Media.

That entity started trading earlier this month, with shares down around 25% to date.

Paramount described Versant as Discovery Global’s “closest comparable” and said “its performance to date illustrates the challenged path ahead” for cable operators, and thus of less value to WBD shareholders who would own the entity. WBD, meanwhile, disputes Versant is a fair comparison.

Ellison, chairman and chief exec at Paramount, said: “Our offer clearly provides WBD investors greater value and a more certain, expedited path to completion.

“Throughout this process, we have worked hard for WBD shareholders and remain committed to engaging with them on the merits of our superior bid and advancing our ongoing regulatory review process.”

Shareholders have until 21 January to take up the Paramount offer.