WBD Board Again Opts for Netflix Over Paramount
Warner Bros. Discovery has again urged its shareholders to choose the purchase offer from Netflix and to ignore the hostile takeover bid from Paramount Skydance. Paramount's amended offer (see 2512220028) remains "inadequate," WBD's board said Wednesday in a letter to shareholders. It comes with "significant costs, risks and uncertainties as compared to the Netflix merger." The WBD board also urged shareholders last month to reject Paramount's offer (see 2512170049).
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LightShed Partners' Rich Greenfield wrote that it's "increasingly clear that Paramount is simply not listening to what the WBD Board has repeatedly and vocally told it that it needs to see to seriously entertain its offer." The penalties that result if the Netflix offer doesn't go through are "playing a very substantial role in why the WBD Board continues to view Netflix’s offer as superior," Greenfield said. "Why would the WBD Board terminate a signed deal with Netflix, which has a strong balance sheet that is gushing cash, absorb termination fees and debt related costs, and accept a highly leveraged offer from Paramount on the hope that the financing is ultimately achievable to get to closing?"
Streaming industry analyst Dan Rayburn wrote that WBD's rejection was expected. WBD and Netflix now must "focus on getting through what is expected to be extensive regulatory scrutiny."