In a escalating battle for control of Warner Bros. Discovery, Paramount has sweetened its acquisition offer, adding financial incentives aimed at swaying shareholders and addressing key concerns from the company's board. The enhanced bid, announced on Wednesday, maintains the original $30 per share cash offer but introduces a $0.25 per share "ticking fee" payable to Warner Bros. Discovery (WBD) shareholders for each quarter the deal remains unclosed beyond December 31, 2026. According to Paramount, this addition equates to approximately $650 million in cash value per quarter, signaling the company's "confidence in the speed and certainty of regulatory approval for its transaction."
The move comes amid a fierce bidding war, with WBD having already agreed to sell its Warner Bros. studios and streaming assets to Netflix in a deal valued at $27.75 per share, recently upgraded to all-cash. WBD has repeatedly advised its shareholders to reject Paramount's hostile takeover attempt, led by David Ellison's company, which seeks to acquire the entirety of WBD. A full-scale public relations campaign is underway, with executives from Paramount, WBD, and Netflix vying for support from content creators, shareholders, and regulators across the U.S. and Europe.
Paramount's latest concessions also include a commitment to fund a $2.8 billion termination fee that would be owed to Netflix if WBD were to switch to the Paramount deal. This addresses a major objection raised by the WBD board regarding the financial penalties of backing out of the Netflix agreement. "The $2.8 billion termination fee that would be due to Netflix if WBD switches sides has been an objection raised by the Warner board," Paramount stated in its announcement, positioning the offer as a solution to this hurdle.
Further details of the enhanced proposal involve Paramount promising to eliminate WBD's potential $1.5 billion financing cost tied to its debt exchange offer. The company said it would fully backstop an exchange offer to relieve WBD of its contractual obligations to bondholders and reimburse shareholders for the $1.5 billion fee without reducing the separate $5.8 billion reverse termination fee. That reverse fee is the amount Paramount (and similarly Netflix) agreed to pay WBD if their respective acquisitions fail to close due to regulatory or other issues.
Addressing WBD's debt challenges, Paramount outlined options for extending the maturity of WBD's existing $15 billion bridge loan. If WBD's current financing sources decline to extend it, Paramount's own debt providers "are fully prepared to do so, with any incremental costs covered by Paramount," the company said. Alternatively, Paramount would allow WBD to structure permanent financing in any manner it chooses, provided the debt is redeemable at a commercially reasonable cost.
To offer additional flexibility during the period between signing and closing, Paramount pledged to match any comparable interim operating covenants that Netflix might provide. Moreover, to assure shareholders of the deal's viability, Paramount expressed openness to "discussing with the WBD Board of Directors contractual solutions to account for the possibility of continuing deteriorating financial performance beyond what WBD is currently projecting for its linear network business."
The financing for Paramount's amended offer is robust, backed by an increased $43.6 billion in equity commitments from the Ellison Family and RedBird Capital Partners, alongside $54 billion in debt commitments from Bank of America, Citigroup, and Apollo. A standout element is an "irrevocable personal guarantee" from Oracle co-founder Larry Ellison, covering $43.3 billion of the equity financing as well as any potential damages claims against Paramount.
David Ellison, in a letter to the WBD board, emphasized a collaborative approach: "While we have tried to be as constructive as possible in formulating these solutions, several of these items would benefit from collaborative discussion to finalize. If granted a short window of engagement, we will work with you to refine these solutions to ensure they address any and all of your concerns." This overture comes as Paramount ramps up pressure on WBD shareholders ahead of key votes.
WBD has not yet scheduled a special shareholder meeting in April to vote on the Netflix deal, though it has urged holders to vote yes. Paramount, in contrast, has been lobbying aggressively for a no vote on the Netflix transaction and encouraging shareholders to tender their WBD shares directly to Paramount. The Ellison-led group has also indicated plans to nominate an alternate slate of directors at WBD's annual meeting later this year.
Both proposed deals face extended timelines for closure, complicated by antitrust scrutiny on both sides of the Atlantic. The Netflix agreement excludes WBD's cable assets, which would be spun off into a separate public company named Discovery Global. This restructuring aims to streamline WBD's operations amid ongoing challenges in the linear television sector.
The corporate tug-of-war reflects broader turbulence in the media industry, where streaming giants like Netflix are consolidating content libraries while traditional players like WBD grapple with declining cable revenues. Paramount's aggressive tactics, including the ticking fee and termination fee coverage, appear designed to highlight perceived weaknesses in the Netflix offer, particularly around financial risks and regulatory hurdles.
Shareholder reactions remain mixed, with no immediate response from WBD's board to Paramount's enhancements. Analysts note that the ticking fee could add significant value over time if delays occur, potentially pushing the effective per-share price well above $30. However, WBD's commitment to Netflix and the ongoing PR efforts suggest the battle is far from over.
Looking ahead, the outcome could reshape the entertainment landscape, combining vast libraries of film, TV, and streaming content under fewer roofs. Regulators will play a pivotal role, with both deals requiring approvals that could stretch into 2027 or beyond. For now, WBD shareholders await clarity as the April special meeting looms and Paramount continues its push for engagement.
In related developments, the media sector is buzzing with other high-profile moves, though none directly tied to this acquisition saga. Paramount recently dated several films for release, including a John Tuggle picture for Christmas and additions to its 2027 slate like Potsy Ponciroli's 'The Rescue' and Teyana Taylor's 'Get Lite.' Meanwhile, industry labor talks between SAG-AFTRA and studios have begun, focusing on sustainable careers for actors and directors.
As the dust settles on this latest offer, all eyes are on WBD's next steps. Whether Paramount's concessions prove sufficient to derail the Netflix deal or merely prolong the uncertainty remains to be seen, but the stakes for one of Hollywood's biggest prizes have never been higher.