Paramount says it will fund a $2.8 billion termination fee payable by Warner Bros. Discovery (WBD) to Netflix if it’s successful in its attempt to take over the studio.
In December, WBD’s board accepted a $82.7 billion offer from Netflix for the purchase of its studio and streaming business, leaving shareholders with ownership of a separate business based around WBD’s portfolio of linear channels.
Paramount had already made several offers for the entire Warner Bros. Discovery business, each of which were rejected the WBD board.
News of the Netflix deal prompted Paramount to launch a hostile takeover bid, seeking to buy a controlling stake in WBD directly from its shareholders.
In turn Netflix simplified its offer, moving from a cash and stock deal to an all-cash offer.
Paramount has now countered with a revised offer which would insulate WBD shareholders from the cost of breaking off the Netflix deal.
Additionally, while its declined to increase its bid from the $30 a share offer already on the table, Paramount says it will pay $0.25 per share for each quarter its transaction has not closed beyond December 31, 2026.
It says this offer underscores “Paramount’s confidence in the speed and certainty of regulatory approval for its transaction.”
David Ellison, Chairman and CEO of Paramount, said: “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.
“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.”