Paramount Skydance Corp. has intensified its pursuit of Warner Bros. Discovery Inc., unveiling a series of financial sweeteners designed to counter the media company’s pending agreement with Netflix Inc. The revised proposal aims to address key concerns raised by Warner Bros.’ board, though it stops short of increasing the headline offer — a move analysts say may limit its effectiveness.
In a statement Tuesday, Paramount said it would assume responsibility for the $2.8 billion termination fee Warner Bros. would owe Netflix if it walks away from its existing deal with the streaming giant. That concession directly tackles one of the largest financial hurdles to abandoning the Netflix transaction.
Beyond covering the breakup fee, Paramount pledged to backstop Warner Bros.’ planned debt refinancing and shoulder up to $1.5 billion in associated costs if required. The commitments are meant to reduce uncertainty around the company’s balance sheet and ease concerns that a transaction with Paramount could leave the combined entity heavily leveraged.
To further bolster its case, Paramount introduced a so-called “ticking fee” — an additional payment of 25 cents per share for each quarter the deal remains unclosed beyond Dec. 31. The provision is intended to reassure shareholders that they will be compensated for any regulatory delays and to signal Paramount’s confidence in securing government approval.
Despite the added incentives, Paramount maintained its original $30-per-share all-cash bid. The company also did not materially alter the leverage profile implied by the merger, a sticking point for Warner Bros.’ leadership.
Warner Bros. said it will review the amended tender offer and issue a recommendation to shareholders in due course. The company has previously rejected multiple approaches from Paramount and is moving ahead with plans to put the Netflix transaction — valued at $27.75 per share, or roughly $82.7 billion — to a shareholder vote by April.
Analysts remain skeptical that the enhanced terms will sway the board. While the added commitments equate to roughly $1.79 per share in incremental value tied to termination and financing costs, Bloomberg Intelligence analysts Geetha Ranganathan and Raveeno Douglas wrote in a research note that they do not expect Warner Bros.’ directors to engage unless Paramount raises its base bid to at least $32 per share.
Markets reacted positively to the renewed bidding dynamic. Shares of Paramount and Warner Bros. each rose about 1.7% following the announcement, while Netflix climbed 3.5%. The gains suggest investors see potential for a higher ultimate offer — or welcome the possibility that Netflix could avoid a costly acquisition battle.
Paramount’s campaign for Warner Bros. has been underway for months. The company, led by David Ellison and backed by the Ellison family, was caught off guard when Warner Bros.’ board agreed to sell its studios and HBO Max streaming service to Netflix. Since then, Paramount has sought to position itself as a financially and strategically superior alternative.
Regulatory positioning has become a central pillar of that strategy. Paramount disclosed that it has complied with a second request for information from the U.S. Justice Department, a step that initiates a 10-day window for regulators to respond. Clearing that review period without objection could strengthen Paramount’s argument that its offer faces fewer antitrust obstacles than the Netflix deal.
The financing behind Paramount’s bid underscores the scale of its ambitions. The Ellison family and its partners have committed $43.6 billion in equity, with plans to borrow an additional $54 billion from Bank of America Corp., Citigroup Inc., and Apollo Global Management.
Whether the enhanced proposal will be enough to derail Netflix’s agreement remains uncertain. For now, Paramount has increased the pressure — but without raising the price, the decisive move may still lie ahead.