The Scene
Netflix and Paramount Skydance executives separately met with European Commission officials Tuesday, setting out their early cases for antitrust approvals in their bids for Warner Bros. Discovery, according to people familiar with the matter.
Regulators expressed concern with Netflix’s potential scale in the EU post-merger, but were generally receptive to both parties’ arguments, according to several people briefed on the meetings. (Netflix and Paramount executives ran into each other in the lobby of the European Commission as they were coming through their back-to-back meetings, they said.)
Paramount received a “second request” from US regulators in recent days, the people said. (Netflix has not, according to another person familiar with the matter.) Netflix is likely to up its $27.75-per-share bid, currently a mix of cash-and-stock, to an all-cash offer in the coming days, according to a person briefed on the plans. It has been in talks with its debt financiers about filling the gap.
Know More
Paramount, meanwhile, is resistant to the idea of increasing its bid, according to people close to the situation. For Paramount, a price increase — especially as Netflix hews closer to an all-cash bid — is a nonstarter without dialogue with WBD. Paramount leaders’ frustration is mounting over WBD’s refusal to designate their bid as “potentially superior” — a status that could open formal negotiations with Paramount without compromising WBD’s existing deal with Netflix.
Paramount’s debt financiers have reaffirmed their commitment to the company throughout the process, according to people close to the situation. Citi, which is helping finance Paramount’s $54 billion in borrowing, has reviewed the decision at the board level and with CEO Jane Fraser, according to a person with knowledge of the matter.
Netflix has also begun to engage with state attorneys general, according to people familiar with the matter. The company has held preliminary conversations with regulators in New York, California, and Colorado, among others, and has already presented to some of them, according to people familiar with the matter.
All sides have also enlisted their Trump whisperers: Jason Miller is working with a member of the Paramount consortium, while Chris LaCivita is advising WBD, Semafor previously reported. Kellyanne Conway’s firm is advising Netflix, according to a person familiar with the matter.
Spokespeople for Netflix, Paramount, and WBD declined to comment.