Paramount Pictures has raised its acquisition offer for Warner Bros. Discovery (WBD) to $31 per share, surpassing its earlier bid of $30. This move intensifies the competition with Netflix, which had previously proposed $27.75 per share solely for WBD’s streaming and film assets, a deal worth approximately $82.7 billion.
In a statement, Warner Bros. Discovery indicated that its board has yet to decide whether Paramount’s offer is superior to that of Netflix. However, the board acknowledged that the new bid from Paramount could potentially lead to a “Company Superior Proposal.”
Paramount’s revised offer not only boosts the cash price but also introduces a daily ticking fee of $0.25 per share per quarter, beginning after September 30, 2026. This fee is designed to increase shareholders’ returns if the deal takes longer than expected, alongside a substantial $7 billion regulatory termination fee if the transaction fails to close due to regulatory concerns. This new termination fee is an increase from the previously proposed $5.8 billion.
Additionally, Paramount has committed to covering the $2.8 billion termination fee that WBD would be obligated to pay Netflix if they opt to withdraw from their existing merger agreement, thereby demonstrating their serious intent to proceed with the acquisition.
The modified schedule for the ticking fee and increased termination fee is aimed at exhibiting Paramount’s confidence in navigating the regulatory landscape, while simultaneously applying pressure on Netflix to counter the new offer.
Despite these developments, discussions between the companies are ongoing, indicating that Paramount may not have reached its final offer yet. WBD expressed a desire to reach a resolution that clarifies Paramount’s intentions to negotiate further and whether Netflix can respond effectively.
Should WBD’s board categorize Paramount’s proposal as a “Company Superior Proposal,” Netflix will have a four-business-day window to present any revisions to its offer.
Paramount is targeting the takeover bid directly towards shareholders, seeking to undermine the $82.7 billion all-cash deal with Netflix that was initially revealed in December and modified in January. WBD’s board had previously set a deadline for Paramount’s best and final bid early this week. Paramount’s offer encompasses the entirety of Warner Bros., which includes significant assets like popular linear cable networks such as CNN, TBS, HGTV, and TNT.
As the clock ticks toward a March 20 date when WBD shareholders are scheduled to vote on the Netflix agreement, the pressure is mounting for all parties involved. Earlier today, WBD announced that its board, along with legal and financial advisors, was reviewing the new proposal from Paramount, although specific details about the bid were not disclosed.
