The second round of bids for Warner Bros. Discovery (WBD) was submitted on 1 December, with Paramount, Skydance, Netflix, and Comcast still in the race for all or part of the company.
Paramount Skydance is looking to buy all of WBD, while Netflix and Comcast want to buy Warner Bros. studios and streaming business – not WBD’s linear TV assets.
According to Variety, Paramount Skydance is backed mainly by Oracle co-founder and billionaire Larry Ellison, and includes financing from RedBird Capital and Apollo Global Management.
The publication noted that Paramount Skydance’s offer also includes funding from Saudi Arabia’s Public Investment Fund (PIF), the Qatar Investment Authority (QIA) and the Abu Dhabi Investment Authority (ADIA).
Variety reported that the level of involvement of the three Arab wealth funds in Paramount’s latest offer does not meet the threshold for approval by the Committee on Foreign Investment in the United States, the US government’s interagency body that reviews foreign investments in US businesses for potential national security risks.
Meanwhile, reports from Bloomberg and the Wall Street Journal noted that Netflix’s higher second-round bid for Warner Bros., HBO Max, and the WB studios operations was mainly cash.
Netflix has told WBD that if its bid is successful, the streamer would honour Warner Bros.’s deals to distribute films in theatres – despite Netflix’s historical opposition to theatrical releases – and to continue producing TV and movies for non-Netflix partners.
Variety previously reported that if Netflix’s bid were successful, it would honour deals to distribute films to theatres and to produce TV and movies for non-Netflix partners.
Comcast has also joined the mix with a new bid for Warner Bros., the publication confirmed.
Looking ahead to the following steps, Variety said the WBD board committee examining the offers will decide whether to proceed with one of the bidders, enter into exclusive negotiations with the bidder, or solicit additional proposals. WBD is aiming to complete this process by the end of 2025.
Last month, WBD rejected an acquisition offer from Paramount Skydance just days after it was made.
According to Deadline, at the time, multiple sources familiar with the ongoing negotiations said the latest bid came in at $24 a share, which was more than the $20 offer made just over a week ago.
The rejection of Paramount’s second bid, initially reported by the New York Post, followed the company’s first confirmation that it is for sale. The company said it has initiated a strategic review process in light of “unsolicited interest” from “multiple parties”.
In a press release, WBD said it had initiated “a review of strategic alternatives to maximise shareholder value.”
“We continue to make important strides to position our business to succeed in today’s evolving media landscape by advancing our strategic initiatives, returning our studios to industry leadership, and scaling HBO Max globally,” said chief executive David Zaslav.
The company said it will continue pursuing the planned split of its cable networks from its streaming and studio businesses, even as it explores potential sale or merger options.