With a shareholder vote and potential proxy battle over Warner Bros. Discovery’s deal with Netflix looming, hostile suitor Paramount Skydance sweetened its proposal for the media company with commitments it claims surpass the threshold needed for WBD’s board to engage on the offer.
Paramount sent a letter to WBD’s board of directors urging them to come to the table to negotiate with Paramount on the proposal and in Tuesday’s announcement contends amendments to the $30 per share all-cash offer show just how confident the David Ellison-led company is about securing a quick regulatory greenlight for a deal.
Updates to Paramount’s WBD offer include a so-called ticking fee, which would provide WBD shareholders incremental cash of $0.25 per share, equivalent to about $650 million in cash each quarter, for every quarter that the transaction doesn’t close beyond December 31, 2026.
In addition, Paramount agreed to fund a $2.8 billion breakup fee that would be owed to Netflix by WBD for terminating their pending agreement. And Paramount offered options to address WBD debt and other obligations, including the potential for $1.5 billion in debt refinancing costs.
The amended offer is fully financed by an increased $43.6 billion in equity commitments from the Ellison Family and RedBird Capital Partners and $54 billion debt commitments from Bank of America, Citigroup, and Apollo.
"The additional benefits of our superior $30 per share, all-cash offer clearly underscore our strong and unwavering commitment to delivering the full value WBD shareholders deserve for their investment,” stated David Ellison, chairman and CEO of Paramount. “We are making meaningful enhancements – backing this offer with billions of dollars, providing shareholders with certainty in value, a clear regulatory path, and protection against market volatility."
The latest update follows recent months when WBD’s board has repeatedly rejected Paramount bids for the entirety of WBD that include linear networks like TNT and CNN among others and continued to support Netflix’s agreement for the company’s studio and streaming businesses only, including HBO and HBO Max.
Most recently the Netflix-WBD deal, originally agreed to December 5, was revised last month to all-cash amid Paramount’s continued hostile pursuit and attempts to appeal directly to WBD shareholders. At that time WBD filed documents with the SEC to speed up the time for shareholders to vote on the Netflix deal by April 2026. Shortly after, Paramount extended the expiration of its tender offer until February 20.
Paramount on Tuesday reiterated its intention to solicit proxies against the Netflix transaction at an upcoming WBD special shareholder meeting.
And as it has throughout the dance for WBD, Paramount today remained insistent that its newly sweetened bid provides WBD shareholders with superior value and has a more certain path to regulatory close than the Netflix agreement – the latter which does not include the global linear networks business that would complete a previously planned spin-off prior to a WBD-Netflix deal close.
In announcing the latest update, Paramount called out the sliding scale merger consideration in Netflix’s agreement, saying WBD’s preliminary proxy statement with the SEC shows ranges from $21.23 to $27.75 per share in cash depending on debt levels of the Discovery Global linear networks business at the time of separation.
In addition to regulatory hurdles, uncertainty around the linear networks business and valuations is one aspect Paramount has continued to emphasize, contending Netflix’s deal “asks WBD shareholders to approve a transaction where they do not have any idea how much actual cash consideration they will receive” since it depends on Discovery Global’s financial state at the time of the spin-off and resulting debt capacity.
To achieve the high-end of the Netflix cash consideration range, Paramount contends Discovery Global would need to support a $17 billion debt load at the time of separation, if that were to occur on June 30.
“WBD has not provided WBD shareholders any financial information about Discovery Global to demonstrate that Discovery Global could support that quantum of debt,” Paramount asserts.
As for WBD, after Paramount extended its tender offer timeline last month, in a statement to Deadline the company suggested the WBD board and shareholders were not swayed at that point.
“Paramount continues to make the same offer our board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix,” stated WBD in late January, per Deadline. “It’s also clear our shareholders agree, with more than 93% also rejecting Paramount’s inferior scheme.”
Netflix, for its part, has continued to express confidence in completing a deal for Warner Bros. Discovery, which would bring a library of iconic IP and franchises, as well as TV and theatrical film studios under the SVOD giant’s umbrella.