MoffettNathanson has focused investor attention on a single pivotal question in the contest for Warner Bros. Discovery - whether the Paramount Skydance consortium will be prepared to raise its offer above $30 per share, according to a recent note authored by analyst Robert Fishman.
Fishman highlights that Warner Bros. Discovery received a seven-day waiver from Netflix to continue discussions with Paramount Skydance, an interval that has sharpened scrutiny around how far the Paramount-backed bidder will move. Warner Bros. Discovery has communicated that Paramount Skydance indicated a "willingness to go to $31/sh. But still not its 'best and final,'" MoffettNathanson reports.
In Fishmans view, the strategic pressure on Netflix would intensify if Paramount Skydance advanced its proposal to at least $32 per share. He wrote that $32 would likely force Netflix to decide whether to match a higher offer. MoffettNathanson further suggests that a $34 per share bid from Paramount Skydance would, in their assessment, be sufficient to close debate over Discovery Globals valuation and effectively conclude the competitive process.
The note also addresses how escalating bid levels alter Netflixs deal calculus. MoffettNathanson states that as the purchase price increases, the transaction becomes less compelling for Netflix. Their base case analysis indicates no accretion for Netflix if the deal clears above $30 per share, although the firm cautions that media merger and acquisition outcomes "rarely play out as expected."
Central to the unfolding dynamic, MoffettNathanson says, is whether Netflix can adhere to a disciplined negotiating stance and walk away if Paramount Skydance advances significantly beyond current indications. The firm frames Netflixs ability to step back as a decisive variable in how the bidding evolves.
On shareholder implications, the note argues Netflix investors could realize benefits regardless of whether the company ultimately wins the contest. MoffettNathanson posits that the longer-term value of Warner Bros. asset suite is not fully reflected in Netflixs stock, and that if Netflix withdraws from the bidding, its core operational drivers subscriber growth, advertising momentum and pricing power - should help restore investor confidence over time.
Concluding its assessment, MoffettNathanson reiterated Buy ratings on both Netflix and Warner Bros. Discovery.
Context limitations: The analysis reflects MoffettNathansons view as described in the firms note and does not introduce new forecasts or external data beyond that note. The notes scenarios and thresholds are presented as the firm articulated them.