워너 브라더스, 파라마운트를 다시 거절하지만 ‘best and final offer’ 요구

Source: Ars Technica

Warner Bros. seeks higher offer, new terms

Paramount is offering $31 per share, but it wants to buy the entire Warner Bros. Discovery company, while Netflix’s deal is for just the streaming and movie studios divisions. The Warner Bros. letter to Paramount said:

“On February 11th, a senior representative of your financial advisor communicated orally to a member of our Board that PSKY would agree to pay $31 per WBD share if we engage with you, and that $31 is not PSKY’s best and final proposal.”

The letter asked Paramount to increase its offer. Warner Bros. wrote:

“We are writing to inform you that Netflix has agreed to provide WBD a waiver of certain terms of the Netflix merger agreement to permit us, through February 23, to engage with PSKY to clarify your proposal, which we understand will include a WBD per share price higher than $31.”

Terms and Conditions

• Warner Bros. asked Paramount to accept the same terms that Netflix agreed to.

• Warner Bros. said that the terms proposed by Paramount give Paramount the right to terminate or amend the deal, whereas the Netflix Merger Agreement:

  • is binding on Netflix,
  • provides WBD stockholders the opportunity to vote on a specific and binding transaction,
  • cannot be amended without WBD’s consent.
    (Source: Warner Bros. statement PDF)

• Warner Bros. also said Paramount’s proposed terms restrict Warner Bros.’ ability to manage its business while the transaction is pending.

Financial Arguments

Warner Bros. has repeatedly pointed to Netflix’s superior finances as a reason for preferring its offer. The Warner Bros. board previously called the Paramount bid “illusory” because it requires an “extraordinary amount of debt financing,” and described Paramount as:

• a $14 B market‑cap company,
• with a ‘junk’ credit rating,
• negative free cash flows,
• significant fixed financial obligations, and
• a high degree of dependency on its linear business.

(Reference: Ars Technica article on Paramount bid)

Consumer Impact

The Netflix/Warner Bros. deal is facing scrutiny over how it would affect streaming consumers. Netflix co‑CEO Ted Sarandos told a Senate committee that the Netflix and HBO Max streaming services are “complementary” and claimed that the combined company will give users more content for less money.

“We are a one‑click cancel, so if the consumer says, ‘That’s too much for what I’m getting,’ they can cancel with one click,” Sarandos said.

(Reference: Senate committee testimony)