In the bidding war for the film production company Warner Brothers Netflix informed not to increase its offer. Netflix co-chief executives Ted Sarandos and Greg Peters said they “wouldn’t take up” Paramount’s offer. The deal is Netflix no longer financially attractive. Warner Brothers had previously formally classified rival Paramount’s improved bid as “superior”.
However, Warner’s board of directors stuck to its recommendation to shareholders to accept Netflix’s takeover offer, according to a statement published after the US stock market closed. The vote on this was scheduled for March 20th. The takeover agreement with Netflix remains in force, it said.
To the one presented on Tuesday improved Paramount proposal heard that the bid for the entirety of what is now Warner Bros. Discovery was increased from $30 to $31 per share in cash. Netflix only wanted to buy the studio and streaming business. Warner’s TV channels – including the news channel CNN – should move to a separate company with this variant.
Paramount is also offering Warner an exceptionally high payment of $7 billion if the deal falls through due to concerns from regulators. On the stock market, Warner and Paramount gained around one percent in after-hours trading, while Netflix shares rose by more than nine percent at times.
Paramount didn’t let up
Warner and Netflix were in early December a binding takeover agreement for the studio and streaming business. A few days later, Paramount turned directly to shareholders and offered $108.4 billion for the entire Warner Bros. Discovery group, including TV channels such as CNN. Netflix offers almost $83 billion for studios and streaming.
Paramount has been trying in recent weeks to overcome Warner’s previous objections and come to the negotiating table. This included the promise to cover the payment of $2.8 billion that Warner would have to transfer to Netflix if the already agreed takeover deal with the streaming company was dissolved.
It’s also about CNN’s independence
The bidding war also has a political side: Netflix co-founder Reed Hastings is considered one of the largest donors to the opposition Democrats in the USA. Paramount was bought last year by the family of tech billionaire Larry Ellison, a supporter of US President Donald Trump. Since the Ellisons’ takeover, the newsroom at Paramount’s CBS has adopted a friendly tone toward the Trump administration.
Trump critics in the US fear that CNN could lose editorial independence under the Paramount umbrella. There are often critical reports about US President Donald Trump. Trump said in December that it was important to ensure that CNN would definitely change hands in a deal.