Warner Bros mulling talks with Paramount after sweetener - report

(Sharecast News) - Warner Bros Discovery is reportedly thinking about reopening talks with Paramount Skydance after the hostile bidder last week sweetened its offer. WBD in December agreed to sell both its film studio and HBO Max streaming service to Netflix for $27.75 per share, or $83bn. Paramount, which owns CBS and MTV, countered in December with $108bn, $30-a-share all-cash deal for the entire company including the cable business.

However, this was rejected by WBD. Paramount last week threw in a ticking fee of 25 cents a share to its offer for any delay in regulatory approval of the deal, which would add around $650m in cash value for every quarter the deal did not close by December 31.

Paramount also offered to cover a $2.8bn termination fee payable to Netflix if the rival deal fell through.

Both Paramount and Netflix have said they would be willing to raise their bids to secure the, Bloomberg reported. However, this is the first time WBD has considered whether Paramount's offer could either result in a better deal or prompt Netflix to offer better deal terms, the report stated.

WBD board members were now discussing whether Paramount's bid could lead to a superior offer, the New York Times reported citing unnamed people familiar with the matter. A stipulation in the contract with Netflix allows WBD to pursue such offers.

If WBD decides to reopen talks with Paramount, it would have to notify Netflix, according to the terms of their deal. Netflix would then have a chance to improve its own offer. WBD has until February 25 to respond to Paramount's latest proposal.

Reporting by Frank Prenesti for Sharecast.com