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Does WB have to pay the breakup fee to Netflix if a Paramount hostile takeover succeeds?
by indigodaddy 11mo ago
Does WB have to pay the breakup fee to Netflix if a Paramount hostile takeover succeeds?
- ZeroCool2u 11mo agoYeah, the reverse breakup fee is ~2.6B I believe, but the Paramount takeover doesn't have to succeed for that fee to kick in. WB just has to back out.
- indigodaddy 11mo agoRight, but if it does succeed, does it then kick in?
- semiquaver 11mo agoYes
- mcoliver 11mo agoWarner breakup fee is different. 2.8 billion.
- JumpCrisscross 11mo agoIt looks like it. $2.8bn by Warner Brothers to Netflix [1]. If the vote looks close, Paramount would be expected to raise their bid to cover that cost. [1] https://www.sec.gov/Archives/edgar/data/1065280/000119312525309939/d45027d425.htm https://www.sec.gov/Archives/edgar/data/1065280/000119312525... 8.3(a)
- dabockster 11mo agoThe failed merger and similar clawback clause between Kroger and Albertsons is currently destroying a significant part of the supply chain for food in the Pacific Northwest. Grocery stores that have been open for 50-75 years - stores where whole neighborhoods and towns were built around - are closing forever, leaving those areas as food deserts. Either way, this entertainment merger is going to get ugly. Consumers are absolutely going to get harmed either way with that clawback clause.
- thisisnotauser 11mo agoExcept you need food to live and tv shows are an artificially scarce resource that's actually free to distribute in unlimited quantities, so the harm is very different.
- ClikeX 11mo agoReal people work in this industry, though. A merger of this size is bound to come with some layoffs and canceled projects. It's not as bad as food scarcity, of course. But it can do some collateral damage.
- orionblastar 11mo agoDoes that mean the DCU Movies might get delayed or canceled?
- dabockster 11mo agoThat, plus fewer studios mean less creativity goes to the mainstream. If you thought AI slop was bad, go re-watch Star Wars Episode 8.
- 11mo ago
- embedding-shape 11mo agoIsn't this submission about Warner Bros Discover, which is a different entity? Seems to be about TV, not movies. But maybe I misunderstand, I did spend a whole of 20 seconds to skim the article...
- VanTheBrand 11mo agoIt’s all one entity with subsidiaries for tv and movies, etc.
- burnte 11mo agoNo. Breakup fes are for when the buyer backs out or theere are external forces that prevent the merger. You can also have a breakup fee if the buyee wants out but that's a different thing. In this case it's Paramount saying "we'll up out government-blocks-the-sale fee from $2.xbn to $5bn" which is saying they have a lot of confidence the merger will go through.
- indigodaddy 11mo agoThanks, this was more the gist of my question.
- JumpCrisscross 11mo ago> in this case it's Paramount saying "we'll up out government-blocks-the-sale fee from $2.xbn to $5bn" which is saying they have a lot of confidence the merger will go through No. Paramount has nothing to do with these numbers, which both come from the Plan of Merger among Netflix, Warner and others [1]. Paramount's bid constitutes an Acquisition Proposal under § 6.2(c). It is a "proposal, offer or indication of interest" from Paramount, a party who is not "Buyer and its Affiliates," which "is structured to result in such Person or group of Persons (or their stockholders), directly or indirectly, acquiring beneficial ownership of 20% or more of the Company’s consolidated total assets." Given it "is publicly proposed" after the date of the Plan of Merger and "prior to the Company Stockholder Meeting," it is a Company Qualifying Transaction (8.3(D)(x)). If 8.3(D)(y) is then satisfied (a condition I got bored jumping around to pin down–if thar be dragons, they be here) and Warner consummates the Company Qualifying Transaction or "enters into a definitive agreement providing for" it (8.3(a)(D)(z)(2), the Buyer can terminate the Plan of Merger under 8.1(b)(iii). That, in turn, triggers the Company Termination Fee of $2.8bn, which is separate from the Regulatory Termination Fee of $5.8bn Netflix would have to pay Warner if other shit happened. [1] https://www.sec.gov/Archives/edgar/data/1065280/000119312525309939/d45027d425.htm https://www.sec.gov/Archives/edgar/data/1065280/000119312525...
- burnte 11mo agoI assure you that Paramount has everything to do with things Paramount does, especially when it comes to purchasing prices and the numbers used to represent prices. Paramount is intimately involved with their own business, sometimes too involved. This article is relating to Paramount's continued attempt to purchase WB despite Netflix announcing a deal with WB.
- raw_anon_1111 11mo agoThis has nothing to do with the Netflix bid. Warner bros is being divided into the cable TV stations + discover channel stations and the movie studio and the backlog is separate. Netflix wants the movie studio + tv back catalog
- indigodaddy 11mo agoThe article bullet point referencing WB Discovery could mislead some into thinking that this takeover is only for the Discovery portion, but that's not the case. $30 would not be for Discovery only (as Netflix's bid is $27.75), it's for the whole kit and caboodle. Yes there are two entities, but/and Paramount wants it all, and the takeover intent is for both.
- kenjackson 11mo agoI've heard that what Kushner wants is CNN. If they could make CBS+CNN lean conservative like Fox, they pull off a potential to swing the country via news media.
- KumaBear 11mo agoThat's a shitty gamble when online media is where it is at now a days. These big media networks are dinosaurs hanging on by a thread.
- kenjackson 11mo agoIt might be. But if you're doing a short-term political power play (rather than a business investment), it could be a good tactical spend. And it might be a smart business investment if the political power play works in such way that you can politically bend the business environment in your favor.
- actionfromafar 11mo agoAnd a cheap spend if you can scrounge the money in some roundabout way from Uncle Sam.