Analysts See Rising Stakes
Analysts at Raymond James said they had long believed Paramount would sweeten its bid, and recent developments suggest momentum in that direction. If Paramount raises its price to $32 or $33 per share, they noted, it could become increasingly difficult to argue that Netflix’s agreement is superior — though Netflix could counter with a higher offer.
“Netflix is still in the driver’s seat, but now having to make its case,” analysts wrote in a Tuesday note.
Paramount has already sweetened its pitch. Last week, it offered a “ticking fee” of 25 cents per share — roughly $650 million per quarter — if its transaction fails to close by year-end. The company also pledged to cover Warner’s $2.8 billion breakup fee owed to Netflix under the merger agreement.
Shareholder Tug-of-War
Paramount has extended its tender offer three times, with the latest deadline set for March 2. As of early last week, more than 42.3 million Warner shares had been validly tendered and not withdrawn — down sharply from over 168.5 million shares on Jan. 21. Even so, that remains a fraction of Warner’s 2.48 billion outstanding Series A shares.
Meanwhile, activist investor Ancora Holdings publicly opposed Warner’s proposed merger with Netflix last week, adding another layer of pressure.
Beyond its tender offer, Paramount confirmed it will nominate its own slate of directors at Warner’s upcoming annual meeting, signaling an escalating proxy contest.
