Paramount’s Hostile Bid for Warner Bros. Discovery Intensifies

The battle for Warner Bros. Discovery (WBD) is heating up as Paramount Global increases its offer in a bid to derail the studio’s agreement with Netflix. Just one month before a crucial shareholder vote, Paramount is attempting to regain the upper hand in the fight for the entertainment giant.

Paramount Sweetens the Deal

Paramount has amended its offer for WBD, now including a $0.25 per share “ticking fee” for each quarter the transaction isn’t finalized beyond December 31, 2026. The company will as well cover the $2.8 billion termination fee that WBD would owe Netflix if it were to accept Paramount’s bid. Paramount proposes to refinance Warner Bros.’ debt, offering to pay $1.5 billion in associated fees The Hollywood Reporter.

A Hostile Takeover Attempt

This move comes as Paramount has launched a hostile bid for Warner Bros. Discovery, after WBD initially accepted Netflix’s all-cash offer of $72 billion, or $27.75 a share The Hollywood Reporter. Paramount’s current offer includes $43.6 billion in equity commitments from the Ellison Family and RedBird Capital Partners, and $54.0 billion in debt commitments from Bank of America, Citigroup, and Apollo. Larry Ellison, father of Paramount CEO David Ellison, has personally guaranteed $43.3 billion of the offer The Hollywood Reporter.

WBD’s Position and Shareholder Vote

Despite Paramount’s increased offer, Warner Bros. Discovery’s board is currently maintaining its recommendation for shareholders to approve the Netflix deal. However, the board has stated it will review the amended offer from Paramount The Hollywood Reporter. The outcome hinges on the upcoming shareholder vote, scheduled for April, where WBD shareholders will decide whether to accept the Netflix offer or potentially pursue a deal with Paramount.

Regulatory Hurdles and David Ellison’s Strategy

David Ellison, Paramount Skydance CEO, has been pursuing a deal for Warner Bros. Discovery for over five months, with his overtures rejected eight times by the WBD board Variety. Ellison is reportedly betting that the Netflix-WBD deal will face regulatory challenges, and has urged Warner Bros. Discovery shareholders to vote against the Netflix deal Variety. Paramount is not prepared to increase its offer beyond $30 a share Variety.