Warner Bros. Falls Below Netflix Offer as Bidding War Hopes Cool

Core Viewpoint - The competitive landscape for Warner Bros. Discovery Inc. is shifting, with Netflix Inc. emerging as the frontrunner over Paramount Skydance Corp. in the bidding process for the company [1]. Group 1: Stock Performance - Warner Bros. shares fell by 2.1% to close at $27.61, which is below Netflix's offer of $27.75 per share in cash and stock [2]. - The stock had previously traded as high as $30, reflecting investor optimism about potential bidding increases from both Netflix and Paramount, but has since dropped nearly 8% [3]. Group 2: Bidding Offers - Netflix's offer includes $23.25 in cash and $4.50 in Netflix stock per share, with the stock portion subject to a "collar" that adjusts based on Netflix's stock price at the time of closing [5]. - Paramount's all-cash bid of $30 per share includes Warner Bros.'s cable networks, which Netflix's offer does not cover [6]. Group 3: Regulatory Concerns - Both Netflix and Paramount's offers are expected to face antitrust scrutiny, leading to potentially lengthy regulatory reviews [4]. - Paramount claims a better chance of regulatory approval, while Warner Bros. believes both offers will be treated equally by regulators [4]. Group 4: Valuation of Assets - The valuation of Warner Bros.'s cable TV networks, which would be spun off in the Netflix deal, is debated, with Paramount suggesting a value of $1 per share, while analysts estimate it could be closer to $4 [6].