Warner Bros. Discovery, Inc. today announced that its Board of Directors has unanimously concluded that the tender offer from Paramount Skydance, launched on December 8, is not in WBD’s best interests and does not qualify as a “Superior Proposal” under WBD’s merger agreement with Netflix, announced on December 5.
In a letter to shareholders, the Board concluded: “The Warner Bros. Discovery Board unanimously reiterates its recommendation in support of the Netflix combination and recommends that WBD shareholders reject PSKY’s offer.”
The company stated that the Netflix agreement is considered superior in value because it offers WBD shareholders $23.25 in cash and $4.50 worth of Netflix common stock (priced within a collar range of $97.91 – $119.67 at closing). Additionally, shareholders gain the value of Discovery Global shares and the opportunity to benefit from future gains after Discovery Global separates from WBD.
The Warner Bros. board countered that Paramount’s most recent offer of a $40.65 billion equity commitment from “an unknown and opaque” Lawrence J. Ellison Revocable Trust, whose assets and liabilities are not publicly disclosed and are subject to change.
Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors, told shareholders: “Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders. This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals. We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”
Following the publication of the shareholder letter, Warner Bros. shares were down 1.4% at $28.5 in premarket trading, while Netflix gained 1.5% and Paramount fell 1.8%.
By CEO NA Editorial Staff
