WBD says Paramount has made a higher offer, and the board will consider the offer versus the Netflix deal

Warner Bros. Discovery It said on Tuesday that it had received a higher takeover offer from… Paramount Skydance It will review the new offer under the terms of its current deal Netflix.

Last week, WBD announced it would re-engage Paramount in deal talks under a seven-day waiver from Netflix. WBD and Netflix have entered into an agreement to sell the legacy media group’s studio and streaming business to the streamer. Paramount is seeking to purchase WBD outright.

“After engaging with PSKY during the limited seven-day waiver period, we received a revised offer from PSKY to acquire WBD, which we are reviewing in consultation with our financial and legal advisors,” WBD said in a statement. “We will inform our shareholders following Board review. The Netflix Merger Agreement remains in effect, and the Board of Directors continues to recommend in favor of the Netflix transaction. WBD shareholders are advised not to take any action at this time with respect to PSKY’s revised tender offer.”

Paramount confirmed in a statement that it had submitted a revised offer and said it would continue with its previously announced tender offer while WBD’s board of directors reviews both deals.

If WBD deems Paramount’s new offer better, Netflix will have four days to improve its previously agreed-upon offer. Netflix agreed to acquire WBD’s studio and streaming assets for $27.75 per share in December, valuing the assets at approximately $72 billion, with a total enterprise value of approximately $82.7 billion.

Paramount then launched a hostile offer to WBD shareholders for $30 per share for all of WBD, which includes linear cable networks such as CNN, TBS, HGTV and TNT and digital assets including Bleacher Report and House of Highlights.

If WBD concludes that Paramount’s new offer is superior and Netflix does not change its offer, Netflix will receive a breakup fee of $2.8 billion. Paramount agreed to finance these fees as part of a previously revised hostile offer.

The combined Paramount-WBD will combine HBO Max and Paramount+ as well as combine two of the five largest film studios by revenue – Warner Bros. and Paramount Skydance Studios. It would also put CNN and CBS News under one ownership structure.

Both the Netflix-WBD deal and potential merger with Paramount-WBD will need approval from US and European regulators to go through, and both deals have raised antitrust concerns among critics.