paramount skydance On Tuesday, the company announced it had entertained the offer. warner bros discoveryadds a so-called ticking fee to demonstrate regulatory confidence, among other new elements.
However, Paramount stopped short of increasing its per-share offer to WBD shareholders. In December, Paramount launched a hostile all-cash tender offer for the entire Warner Bros. Discovery Company for $30 per share. The company claims its offer is better than its pending deal with Warner Bros. Discovery. Netflix.
“The additional benefits of our excellent all-cash offer of $30 per share clearly underscore our strong and unwavering commitment to maximizing the value of our WBD shareholders’ investment,” Paramount CEO David Ellison said in a statement. “We are making meaningful enhancements and supporting this proposal with billions of dollars, providing shareholders with value certainty, a clear regulatory path and protection against market volatility.”
The “ticking fee” is a payment that will be made to WBD stockholders in the event of a potential delay in the receipt of regulatory approval for the Paramount-WBD partnership.
Paramount has set the fee at 25 cents per share for each quarter the transaction is not completed after the end of 2026, “underscoring Paramount’s confidence in the promptness and certainty of regulatory approval for the transaction,” the company said.
The so-called ticking fees amount to about $650 million in cash for each quarter that doesn’t close after Dec. 31.
Additionally, Paramount announced Tuesday that it will cover the $2.8 billion termination fee that Warner Bros. Discovery would pay Netflix if the deal falls through, and eliminates potential $1.5 billion in debt refinancing costs.
Paramount said the amendment, which includes ticking fees, termination fee financing and refinancing, will be “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.
In a statement Tuesday, WBD confirmed receipt of the proposed amendment and said its board will review and consider it. The board of directors has consistently recommended that WBD shareholders reject Paramount’s proposal. Paramount is suing WBD for more information about the sale process and its valuation, and said it intends to name a director to WBD’s board.
Jerry Cardinal of Redbird Capital Partners told CNBC’s David Faber on Tuesday that the revised bid is an effort to “continue to strengthen and perfect” Paramount’s offer.
“What we’ve done is we’ve perfected it by removing from the table all the so-called administrative items that they’ve been using to suggest they don’t want to engage with us,” said Cardinale, the company’s founder.
Cardinale said Redbird and Paramount will continue to appeal directly to shareholders if WBD still rejects the offer, but said he believes there is no reason for the board not to get involved.
“Our contracts are very aligned to providing the best value and certainty, and that has never changed,” he said.
Netflix’s proposed acquisition of WBD’s streaming and studio assets was estimated to close within 12 to 18 months from the time the acquisition was announced in December. The deal is expected to close after the separation of WBD’s television networks, including CNN, TBS and Discovery, is completed, with the separation expected in the third quarter of 2026.
Last month, Netflix revised its offer for the WBD assets to pay $27.75 per share in all cash. The initial deal consisted of a combination of cash and stock and was valued at $72 billion.
Paramount’s revised proposal is based on antitrust concerns raised by lawmakers and industry insiders since Netflix announced its proposed acquisition.
Netflix co-CEO Ted Sarandos recently said publicly during a January earnings call with investors that he was confident the deal would be approved. Sarandos said he believed the deal could secure regulatory approval, arguing that it would preserve jobs at a time when mass layoffs are occurring across the media because “this deal is pro-consumer, pro-innovation and pro-worker.”
—CNBC’s Laya Neelakandan contributed to this report.
