Paramount softens the WBD bid and fails to increase value
Paramount Skydance said Tuesday it had sweetened its offer Warner Bros. Discoveryby adding a so-called ticking fee, among other new elements, to signal the trust of regulators.
However, Paramount failed to increase its per share offer to WBD shareholders. In December, Paramount launched a hostile takeover bid for all of Warner Bros. Discovery at $30 per share, all in cash. The company claims its offer is superior to a pending transaction between Warner Bros. Discovery and Netflix.
“The additional benefits of our outstanding cash offer of $30 per share clearly underscore our strong and unwavering commitment to providing WBD shareholders with the full value they deserve for their investment,” Paramount CEO David Ellison said in a statement. “We are making significant improvements – supporting this offering with billions of dollars, providing shareholders with certainty of value, a clear regulatory path and protection from market volatility.”
The ticking fee is payable to WBD shareholders for possible delays in obtaining regulatory approval for a combination between Paramount and WBD.
Paramount set the fee at 25 cents per share per quarter in which the transaction was not completed after year-end 2026, “underscoring Paramount’s confidence in the speed and certainty of regulatory approval of its transaction,” the company said.
The so-called ticking fee represents a cash value of around $650 million per quarter for each quarter in which the deal does not close after December 31.
Additionally, Paramount said Tuesday that it would fund the $2.8 billion termination fee that Warner Bros. Discovery would owe Netflix if that deal falls through, and that it would also eliminate $1.5 billion in potential refinancing costs.
Paramount said the revised offer – including the tick fee, termination fee financing and refinancing – is “fully funded” by $43.6 billion in equity commitments from the Ellison family and RedBird Capital Partners, and $54 billion in debt commitments from lenders Bank of America, Citigroup and private equity firm Apollo.
Gerry Cardinale of RedBird Capital Partners told CNBC’s David Faber on Tuesday that the amended offer is an attempt to “further strengthen and perfect” Paramount’s offering.
“What we’ve done is we’ve perfected it by taking off the table all of the, what I call, more bureaucratic things that they used to suggest that they weren’t going to work with us,” said Cardinale, the firm’s founder.
If WBD still rejects the offer, RedBird and Paramount will continue to go directly to shareholders to make their case, Cardinale said, although he believes there is no reason for the board not to get involved.
“Our business is very much focused on delivering the best value and security – that has never changed,” he said.
Netflix’s planned acquisition of WBD’s streaming and studio assets was expected to close in 12 to 18 months after the deal was announced in December. This deal would be completed after the separation of WBD’s television networks such as CNN, TBS and Discovery, which is expected in the third quarter of 2026.
Last month, Netflix changed its own offer for WBD assets, paying $27.75 per share all in cash. The original deal was a combination of cash and stock with an equity value of $72 billion.
Paramount’s revised offer draws on antitrust concerns raised by lawmakers and industry insiders since Netflix announced the proposed deal.
Netflix co-CEO Ted Sarandos has publicly expressed his confidence in the deal’s approval, most recently in the company’s conference call with investors in January. Sarandos said he believed the deal would win regulators’ approval, claiming it would protect jobs at a time of heavy layoffs across media “because this deal is consumer-friendly, innovation-friendly and worker-friendly.”
