Paramount sweetens WBD bid, stops short of raising value
Paramount Skydance He said he was softening his offer on Tuesday Warner Bros. discoveryIt also adds a so-called “signal fee” to signal regulatory confidence, among other new elements.
However, Paramount stopped short of increasing its per-share offer to WBD shareholders. In December, Paramount announced that Warner Bros. He initiated an all-cash hostile tender offer for all of Discovery at $30 per share. The company said its offer was from Warner Bros. It argues that it is superior to a pending transaction with Discovery. netflix.
“The additional benefits of our superior cash offer of $30 per share clearly underscore our strong and unwavering commitment to delivering WBD shareholders the full value they deserve for their investment,” said Paramount CEO David Ellison. expression. “By supporting this offering with billions of dollars, we are making meaningful improvements by providing shareholders with certainty of value, a clear regulatory pathway, and protection against market volatility.”
The “toll fee” will be paid to WBD shareholders for any potential delays in obtaining regulatory approval for the Paramount-WBD combination.
The company said Paramount set the fee at 25 cents per share for a quarter in which the transaction is not completed after the end of 2026, which “underscores Paramount’s confidence in the speed and certainty of regulatory approval for its transaction.”
The so-called transition fee is equivalent to roughly $650 million in cash value each quarter for each quarter the deal is not completed after December 31.
In addition, on Tuesday, Paramount announced that it would be in charge of Warner Bros. if the deal falls through. He said it would cover the $2.8 billion termination fee Discovery would owe Netflix and would also eliminate a potential $1.5 billion refinancing cost of the debt.
Paramount said the revised offer — including the toll, termination fee financing and refinancing — is “fully funded” by $43.6 billion in equity commitments from the Ellison family and RedBird Capital Partners, as well as $54 billion in debt commitments from lenders Bank of America, Citigroup and private equity firm Apollo.
Netflix’s bid to acquire WBD’s streaming and studio assets is estimated to be completed within 12 to 18 months from the deal being announced in December. This deal is expected to be completed following the departure of WBD’s TV networks such as CNN, TBS and Discovery in the third quarter of 2026.
Last month, Netflix amended its own bid for WBD assets to pay $27.75 per share in all cash. The initial deal consisted of a combination of cash and stock valued at $72 billion in equity.
Paramount’s revised offer builds on antitrust concerns voiced by lawmakers and industry insiders since Netflix announced the proposed deal.
Netflix co-CEO Ted Sarandos last publicly expressed his confidence in the approval of the deal during the company’s January earnings call with investors. Sarandos said he believes the deal will win regulatory approval and that it will protect jobs at a time of massive layoffs in the media, “because this deal is pro-consumer… pro-innovation, pro-worker.”
