HBO owner reportedly considering re-opening sales process
Warner Bros Discovery (WBD) could reopen sales talks with Paramount Skydance, following the enhanced offer made from the David Ellison-led US studio last week.
WBD told investors on Wednesday it was reviewing the ‘ticking fee’ bid - a promise by Paramount to pay WBD shareholders every quarter $0.25 per share if the takeover had not been completed by 31 December - and Bloomberg reported that the David Zaslav-led company is now considering opening up the takeover process.
Ellison, Paramount’s chair and chief exec, said at the time of the ‘ticking fee’ offer that its latest sweetener underlined the “strong and unwavering commitment” to ensuring WBD got shareholder value.
The payment proposal, valued by the Star Trek and Top Gun owner at $650m each quarter, was accompanied by a promise to cover the $2.8bn fee that WBD would owe Netflix if it ditched the streamer’s $83bn offer, which had initially been accepted.
Paramount also told WBD it would remove a $1.5bn financing cost attached to its bid but did not improve on its headline $30-per-share offer, which values the entire WBD operation (incuding its cable-focused Discovery Global unit) at $108bn.
Should WBD decide to do reopen the sales process, it would first have to inform Netflix, which could prompt another round of bidding.
Paramount has given WBD shareholders until 20 February to support its latest offer. Few have yet done so publicly although US-based Ancora Holdings Group, which owns around $200m in WBD shares, said it would support the Ellison-led deal over Netflix.
The latter improved its offer in January by making it an all-cash deal.
The move marks the latest development in the protracted battle for the HBO owner’s future, which has been raging for more than six months following a series of rejected bids from Paramount.
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