WBD deems Paramount’s takeover bid ‘superior’ — Netflix has four business days to counter

(CNN) — The Warner Bros. Discovery board has deemed Paramount’s latest takeover offer “superior” to the existing deal for Netflix to buy Warner Bros and HBO.

Warner Bros. Discovery, WBD for short, has not scrapped the Netflix deal. But Netflix now has four business days to respond by revising its own offer.

In practice, this means raising the price and adjusting the deal terms in ways that match or surpass Paramount’s proposal.

A Netflix spokesperson had no immediate comment on whether it will do so.

At the end of the four-day period, the WBD board could decide to terminate its Netflix agreement, thereby opening the door for Paramount, if the board concludes the Paramount offer is still “superior.”

Paramount’s most recent bid, announced Tuesday, valued all of WBD, including CNN, at $31 per share. Paramount attached several deal sweeteners that appealed to the WBD board, including a $7 billion “regulatory termination fee.”

When WBD released quarterly earnings on Thursday morning, CEO David Zaslav said the bidding war has “led to eight price increases” and “thus far achieved a 63% increase in value versus the first offer received in September, delivering significant value for WBD shareholders throughout the process.”

“We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing,” Paramount CEO David Ellison said in a statement.

Sarandos visits Trump White House

Netflix co-CEO Ted Sarandos visited the White House on Thursday for meetings — though not with the president — just before WBD announced the newest twist in the mega-merger saga.

President Trump has previously indicated that he favors Paramount. And last weekend, he publicly told Netflix to remove board member Susan Rice, a former Obama advisor, or “pay the consequences” — renewing the prospect that he will put his thumb on the corporate scale.

Should the Netflix merger proceed, some industry analysts expect the Trump Justice Department to sue to block the deal, potentially leading to a protracted period of litigation.

But Sarandos has exuded confidence about Netflix’s ability to get the deal done.

A Wednesday report by Politico about the upcoming Sarandos visit spurred speculation about whether the Netflix chief would have face time with the president. That apparently led the White House to clarify on Thursday that Sarandos was not meeting directly with Trump.

“Netflix is meeting with staff members at the White House,” a White House official told CNN.

That lined up with an account from a Netflix spokesperson, who said the company’s leadership did not request a meeting with Trump in the first place.

The Netflix spokesperson also said the visit with staff members was set up two and a half weeks ago. The timing point is noteworthy because the tug-of-war over Warner has escalated in recent days.

With Netflix’s blessing, WBD opened a window for fresh talks with Paramount last week, and on Tuesday, the WBD board confirmed that Paramount had raised its bid to $31 per share.

Paramount made other promises to sweeten the deal, including a “$7 billion regulatory termination fee,” emphasizing Paramount’s confidence that its deal would not be blocked by the Trump administration.

Paramount CEO David Ellison has made a number of moves to forge a close relationship with Trump. The two men had a private meeting at the White House earlier this month, as CNN previously reported.

Soon after the Ellison meeting, Trump told an interviewer that “I haven’t been involved” in the battle over WBD, despite previously saying of the Netflix deal, “I’ll be involved in that decision, too.”

Trump has also said it is “imperative that CNN be sold,” and the current deal with Netflix does not entail CNN being sold; instead, it would be spun off into a new entity with WBD’s other cable assets.

Sarandos has been at the White House repeatedly in recent months, though not always to meet with the president.

Trump has praised Sarandos as a “great person” — but has posted criticism of Netflix on Truth Social.

Sarandos, in turn, has complimented Trump’s interest in the entertainment industry and downplayed the criticism.

When asked by the BBC about Trump’s post assailing Rice, Sarandos said, “This is a business deal. It’s not a political deal. This deal is run by the Department of Justice in the US and regulators throughout Europe and around the world.”

The next move will be Netflix’s to make, given the WBD board’s determination on Thursday afternoon.

Paramount CEO David Ellison said in response, “We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing.”

Earlier on Thursday, when WBD released quarterly earnings, CEO David Zaslav said the ongoing bidding war has “led to eight price increases” and “thus far achieved a 63% increase in value versus the first offer received in September, delivering significant value for WBD shareholders throughout the process.”

“Our focus has and always will be maximizing value and certainty while mitigating downside risks,” he said, “and the board will evaluate any proposal against that standard, with the objective of delivering the best deal for our shareholders.”

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Alejandra Jaramillo and Liam Reilly contributed reporting.