It shocked many when the news broke that Warner Bros. had accepted an acquisition deal from Netflix that would see the streaming giant snapping up the production titan in a deal valued at $82.7 billion. It seemed shocking because of the size but also because of the fact that Warner Bros. was supposedly in conversation with other companies as well for deals that could have perhaps been even more beneficial for Warner Bros. owners and shareholders.
One such example came from Paramount, with the rival production company routinely throwing out bids that have been getting increasingly large and that dwarf the Netflix deal. The latest of the bunch is a $108 billion valued deal that Warner Bros. has once again shot down as it regards the deal as inferior, as per Financial Times.
On the surface, this might seem like a mad decision, but the $83 billion Netflix deal only includes the studio and streaming business of Warner Bros., whereas Paramount's $108 billion offer was under the grounds of the entire Warner Bros. business, including the legacy TV assets like CNN.
Warner Bros. is also unsure of Paramount's financing for such a mega deal, as the rival company will be taking on around $54 billion in debt to get the deal over the line, something that Warner Bros. expresses as "materially more risk" and which has a heightened "risk of failure" when compared to Netflix's deal.
While the bids from Paramount have all been failures so far, the frequent nature of them suggests that it isn't done yet. The difficult part will now be deciding whether to up the bid further while laying out plans to ease the concerns of the Warner Bros. board, all before a January 21 deadline. At the moment, Netflix is pushing forward with its deal and going through the necessary bodies to get it over the line, meaning if Warner Bros. backed out and accepted Paramount's improved bid, the streaming giant would be entitled to massive payouts, including a $2.8 billion termination fee from Warner Bros.
This game of back and forth will likely continue for some time as Netflix doesn't expect the acquisition of Warner Bros. to be completed for at least 12-18 months.