David Ellison’s Paramount Skydance has revised its offer to acquire Warner Bros. Discovery, though the overall bid of $30 per share remains unchanged. Warner Bros. Discovery has previously rejected Paramount’s advances, opting instead to sell its streaming and studio assets, including HBO, to Netflix for $27.75 per share in cash. Unlike the Paramount offer, the Netflix deal does not include WBD’s cable channels, such as HGTV and TNT.
A Revised Offer
On Tuesday morning, Paramount informed Warner Bros. Discovery’s board of directors of adjustments to its offer. These include a “ticking fee” of $0.25 per share – approximately $650 million per quarter – payable starting in January 2027 if the deal hasn’t closed. Paramount also pledged to cover costs associated with the acquisition, including a $2.8 billion breakup fee to Netflix and a potential $1.5 billion for debt refinancing.
Paramount reiterated that the $43.6 billion in equity backing its $108 billion offer is fully guaranteed by the Ellison family. The company argues its bid is “superior” to Netflix’s, claiming Warner Bros. Discovery’s television networks hold limited value when factoring in debt and the performance of a similar company, Versant.
Whereas Paramount has made multiple attempts to acquire Warner Bros. Discovery, it has not increased its initial purchase price since the Netflix deal was announced. Paramount continues to appeal to Warner Bros. Discovery shareholders, arguing that its offer is the better option.
David Ellison previously signaled a willingness to adjust his offer, texting Warner Bros. Discovery CEO David Zaslav on December 4th stating, “Please note importantly we did not include ‘best and final’ in our bid.” Ellison was also reportedly overheard suggesting the Warner Bros. Discovery board would be acting in breach of its fiduciary duty if it accepted his $30-per-share offer, as it had already rejected it once.
Frequently Asked Questions
What is Paramount offering to acquire Warner Bros. Discovery?
Paramount is offering $30 per share in cash for all of Warner Bros. Discovery. They have added a “ticking fee” of $0.25 per share each quarter starting in January 2027 if the deal isn’t finalized and have pledged to cover associated costs like a breakup fee to Netflix.
What is Netflix offering for Warner Bros. Discovery?
Netflix is offering $27.75 per share in cash for Warner Bros. Discovery’s streaming and studio assets, including HBO. This deal does not include Warner Bros. Discovery’s cable channels.
What role is Donald Trump playing in the potential acquisition?
Donald Trump initially indicated he would be involved in the regulatory decision, but later stated he would depart the decision to the Department of Justice. Both Netflix co-CEO Ted Sarandos and David Ellison have established relationships with the former president.
Given the ongoing negotiations and regulatory considerations, will Paramount’s strategy ultimately succeed in securing a deal with Warner Bros. Discovery?
