Warner Bros. Discovery is weighing up reopening sales talks with Paramount Skydance Corp after receiving its most recent amended offer.
According to Bloomberg, people familiar with the matter said that members of the Warner Bros board are discussing whether Paramount could offer a path to a superior deal in the bidding war against Netflix.
The board is yet to decide how to respond and still has a binding agreement with Netflix.
Paramount submitted amended terms last week that addressed several concerns.
The company will cover a US$2.8 billion fee owed to Netflix if Warner Bros terminates their agreement and is offering to backstop a Warner Bros debt refinancing.
Paramount also said it would compensate Warner Bros shareholders if the deal doesn’t close by 31 December, underscoring its confidence that the deal will get swift regulatory approval.
While there are still some concerns about Paramount’s offer, this is the first time the Warner Bros board has considered that it could lead to a better deal or prompt Netflix to up its bid.
Warner Bros had already agreed to sell both its film studio and HBO Max streaming services to Netflix for $27.75 per share.
Paramount's initial bid promised $30 per share in an all-cash deal, and last week the company upped the ante, saying it would add a ticking fee of 25 cents a share to its offer for any delay in regulatory approval of the deal.
Both Paramount and Netflix have said they would be willing to raise their bids in order to secure a deal for Warner Bros.
Paramount CEO David Ellison said this won’t be his last and final bid, while Netflix’s leadership has told shareholders it could go higher as well.
Paramount (NASDAQ: PSKY) shares finished 0.7% higher at $10.32 on Friday, and its market cap is $11.39 billion. However, its stocks have dropped 3.10% over the past year.
Netflix (NASDAQ: NFLX) shares closed up 1.33% to $76.87, and its market cap is $324.56 billion. Its stocks have dropped 25.12% over the past year.
