Paramount Sweetens Cash Bid for Warner Bros. Discovery

Paramount has raised the stakes in its takeover battle for Warner Bros. Discovery (WBD), enhancing its $30 per share all-cash tender offer and urging the target’s board to reconsider a rival deal with Netflix.

Paramount said in a Feb. 10 statement that it amended its existing offer to include a quarterly “ticking fee” of 25 cents per share beginning Jan. 1, 2027, if the transaction has not closed.

The company also pledged to fund a $2.8 billion termination fee payable to Netflix and to address debt-related costs that WBD cited as concerns.

The structure of Netflix’s agreement with WBD ties part of the consideration to the financial condition of a planned spin-off entity, Discovery Global.

According to WBD’s Feb. 10 preliminary proxy statement filed with the SEC, the Netflix merger consideration ranges from a minimum of $21.23 to a maximum of $27.75 per share in cash, depending on debt levels allocated to Discovery Global at separation.

Paramount said its revised proposal provides greater certainty and value than Netflix’s competing agreement.

It said its revised offer still values WBD at $30 per share in cash, implying an equity value of about $78 billion and an enterprise value of roughly $108 billion, including debt.

The ticking fee, according to Paramount, would amount to approximately $650 million in additional cash each quarter beyond Dec. 31, if the deal is not completed.

“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,” Paramount CEO David Ellison said in the statement.

The company also said it would fund WBD’s $2.8 billion break fee to Netflix upon termination of that agreement, describing the payment as incremental to its cash offer price and separate from a $5.8 billion reverse termination fee contained in its own merger proposal.

Paramount also offered to eliminate up to $1.5 billion in potential financing costs tied to WBD’s planned debt exchange.

It said it would backstop an exchange offer to relieve WBD of bondholder obligations and fully reimburse shareholders for the $1.5 billion fee if both the exchange failed and the Paramount transaction did not close.

Paramount said its offer is fully financed by $43.6 billion in equity commitments from the Ellison family and RedBird Capital Partners, along with $54 billion in debt commitments from Bank of America, Citigroup, and Apollo.

The equity financing includes an irrevocable personal guarantee from Larry Ellison totaling $43.3 billion, covering equity commitments and potential damages claims.

Regulatory Progress

Paramount said on Feb. 9 that it certified compliance with a second request for information from the U.S. Department of Justice related to its tender offer for WBD shares. The certification starts a 10-day waiting period under federal antitrust rules.

The company said it has engaged with the Department of Justice’s Antitrust Division, the European Commission, and the UK Competition and Markets Authority. It added that it secured clearance from Germany’s foreign investment authorities on Jan. 27.

Paramount said its transaction would not raise major competition concerns, saying that Netflix, which it described as dominant in streaming video-on-demand markets in the United States and Europe, could face a “long and uncertain” review.

The Epoch Times reached out to Netflix for comment but did not receive a response by publication time.

In a Jan. 20 statement, Netflix said that together with WBD it remained “committed to working closely with regulators and all stakeholders to ensure a smooth and successful transaction.”

President Donald Trump, who said in December that he would have a say in whether the proposed merger between Netflix and Warner Bros. Discovery proceeds, indicated last week that he plans to stay out of the battle between Netflix and Paramount over WBD.

“I haven’t been involved,” he said in a Feb. 5 interview with NBC News. “I’ve been called by both sides. It’s the two sides, but I’ve decided I shouldn’t be involved. The Justice Department will handle it,” Trump said.