Paramount extends its deadline for its Warner Bros. offer until next month

Regardless of which suitor prevails, a sale of Warner Bros. Discovery is anticipated to be a protracted process, likely attracting considerable antitrust scrutiny

The battle for control of Warner Bros. Discovery has intensified, with Skydance-owned Paramount extending its hostile takeover bid and doubling down on efforts to sway shareholders. Paramount has once again pushed back the deadline for its $77.9 billion offer, giving Warner stockholders until Feb. 20 to sell their shares.

The offer, which values Warner Bros. Discovery at over $108 billion, including debt, remains at $30 per share in cash. This marks the second extension since Paramount launched its challenge to Warner’s proposed merger with Netflix last month. Despite these efforts, Paramount has only secured tenders for just over 168.5 million Warner shares as of Wednesday, significantly short of the 50 per cent required to gain effective control of the company, which has approximately 2.48 billion outstanding shares.

Warner Bros. Discovery has firmly rejected Paramount’s advances. In an emailed statement, the company said: "Once again, Paramount continues to make the same offer our Board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix." Warner added that it is "clear our shareholders agree," noting that more than 93 per cent have so far spurned "Paramount’s inferior scheme."

The rival bid from Netflix, agreed in December, is an all-cash deal worth $72 billion for Warner's studio and streaming business, $83 billion including debt, or $27.75 per share, is described by the companies as more straightforward and is expected to expedite a shareholder vote by April.

Regardless of which suitor prevails, a sale of Warner Bros. Discovery is anticipated to be a protracted process, likely attracting considerable antitrust scrutiny (AFP via Getty Images)

Paramount, however, maintains its offer is superior to Netflix’s and has accused Warner’s leadership of a lack of transparency with stockholders. The company claimed on Thursday that Warner’s board was "rushing to solicit shareholder approval" for the Netflix merger, warning that this could lead to a reduced payout for shareholders if debt from a previous spinoff of Warner’s networks business were to impact the studio and streaming operations.

In a significant escalation, Paramount is also pursuing a proxy fight. Earlier this month, it announced plans to nominate its own slate of directors to Warner’s board and has now filed preliminary materials to solicit proxies in opposition to the Netflix merger.

The complexity of the bids lies in their scope. Netflix’s proposed acquisition focuses solely on Warner’s studio and streaming assets, encompassing its production arms and platforms like HBO Max. Paramount, conversely, seeks to acquire the entire company, which would bring its news and cable operations, including CNN, under the same corporate umbrella as CBS. Should Netflix succeed, Warner’s current networks would be spun off into a new entity, Discovery Global.

Regardless of which suitor prevails, a sale of Warner Bros. Discovery is anticipated to be a protracted process, likely attracting considerable antitrust scrutiny. Political considerations are also expected to play a role, with Donald Trump having previously made suggestions about his personal involvement in the approval of such deals.

On Thursday, shares in Warner Bros. Discovery and Netflix both saw slight declines, while Paramount-Skydance shares rose by nearly 3 per cent.