Paramount sweetens WBD bid, stops short of raising value

Paramount Skydance said Tuesday it has sweetened its offer for Warner Bros. Discovery, adding a so-called “ticking fee” to signal regulatory confidence among other new elements.

Paramount stopped short, however, of raising its per-share offer to WBD shareholders. In December, Paramount launched a hostile tender offer for the entirety of Warner Bros. Discovery at $30 per share, all cash. The company argues its offer is superior to a pending transaction between Warner Bros. Discovery and Netflix.

“The additional benefits of our superior $30 per share, all-cash offer clearly underscore our strong and unwavering commitment to delivering the full value WBD shareholders deserve for their investment,” said Paramount CEO David Ellison in a statement. “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.”

The “ticking fee” is payable to WBD shareholders for any potential delays in receiving regulatory approval for a Paramount-WBD tie-up.

Paramount has set the fee at 25 cents per share per quarter that the transaction hasn’t closed after year-end 2026, “underscoring Paramount’s confidence in the speed and certainty of regulatory approval for its transaction,” the company said.

The so-called ticking fee is equivalent to roughly $650 million in cash value each quarter for every quarter the deal is not closed past Dec. 31.

In addition, on Tuesday Paramount said it would fund the $2.8 billion termination fee that Warner Bros. Discovery would owe Netflix if that deal were to fall through, and it would also eliminate a potential $1.5 billion refinancing cost of debt.

Paramount said the revised offer — including the ticking fee, funding the termination fee and refinancing — is “fully financed” by $43.6 billion of equity commitments from the Ellison family and RedBird Capital Partners, as well as $54 billion in debt commitments from lenders Bank of America, Citigroup and private equity firm Apollo.

RedBird Capital Partners’ Gerry Cardinale told CNBC’s David Faber on Tuesday that the amended bid was an effort to “continue to reinforce and perfect” Paramount’s offer.

“What we’ve done is we’ve perfected it by taking off the table all of the, what I call, more clerical items that they have been using to suggest that they are not going to engage with us,” Cardinale said.

If WBD still declines the offer, Cardinale said RedBird and Paramount will continue going directly to shareholders to make their case, though he said he believes there is no reason for the board to not engage.

“Our deal is highly aligned with delivering the best value and certainty – that has never changed,” he said.

Netflix’s proposed acquisition of WBD’s streaming and studios assets was estimated to close in 12 to 18 months from when the deal was announced in December. That deal would close after the separation of WBD’s TV networks, such as CNN, TBS and Discovery, takes place, which is expected in the third quarter of 2026.

Last month, Netflix amended its own offer for WBD assets to pay $27.75 per share entirely in cash. The initial deal was composed of a combination of cash and stock at an equity value of $72 billion.

Paramount’s revised offer leans on antitrust concerns that have been raised by lawmakers and industry insiders since Netflix announced the proposed deal.

Netflix co-CEO Ted Sarandos has publicly noted his confidence in getting the deal approved, most recently in the company’s January earnings call with investors. Sarandos said he believed the deal would secure regulatory approval, contending it would preserve jobs at a time of heavy layoffs across media “because this deal is pro-consumer … pro-innovation, pro-worker.”