Paramount improves WBD offer, stops raising value

Paramount Skydance She said on Tuesday that she had sweetened her offer to Warner Bros. DiscoveryAdding the so-called “visa fee” to indicate regulatory trust among other new elements.

However, Paramount stopped raising its per-share offer to WBD shareholders. In December, Paramount launched a hostile bid for Warner Bros. Discovery at $30 per share, all cash. The company says its offer is better than the pending deal between Warner Bros. Discovery and Netflix.

“The additional benefits of our premium $30 per share, all cash offer clearly underscores our strong and steadfast commitment to delivering the full value that WBD shareholders deserve for their investment,” Paramount CEO David Ellison said in a statement. “We are making meaningful improvements – backing this offering with billions of dollars, providing shareholders certainty of value, a clear regulatory path, and protection from market volatility.”

A “signing fee” is paid to WBD shareholders for any potential delay in obtaining regulatory approval for the tie-up between Paramount and WBD.

Paramount set the fee at 25 cents per share for each quarter the deal does not close after the end of 2026, “underscoring Paramount’s confidence in the speed and certainty of regulatory approval of its transaction,” the company said.

The so-called signing fee equates to approximately $650 million in cash value per quarter for each quarter the deal is not closed after December 31.

Additionally, Paramount said Tuesday it will finance the $2.8 billion termination fee that Warner Bros. will owe. Discovery for Netflix if the deal fails, and it would also eliminate the cost of a potential $1.5 billion debt refinancing.

Paramount said the revised offering — including signing fees, termination and refinancing fees — is “fully funded” by $43.6 billion in 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’ Jerry Cardinale told CNBC’s David Faber on Tuesday that the revised offer was an effort to “further enhance and improve” Paramount’s offer.

“What we did is we perfected it by removing all of what I call the clerical elements that they were using to indicate that they were not going to do business with us,” Cardinale said.

If WBD continues to reject the offer, Cardinale said RedBird and Paramount will continue to go directly to shareholders to make their case, though he said he believes there is no reason for the board not to participate.

“Our deal is very much aligned with providing the best value and assurance – and that has never changed,” he said.

Netflix’s proposed acquisition of WBD’s streaming and studio assets is expected to close within 12 to 18 months from the date the deal was announced in December. This deal will close after the spin-off of WBD’s television networks, such as CNN, TBS and Discovery, which is expected to occur in the third quarter of 2026.

Last month, Netflix revised its bid for WBD assets to pay $27.75 per share entirely in cash. The initial deal consists of a combination of cash and stock with an equity value of $72 billion.

Paramount’s revised offer is based on antitrust concerns raised by lawmakers and industry insiders since Netflix announced the proposed deal.

Netflix co-CEO Ted Sarandos has publicly expressed confidence in getting the deal approved, most recently on the company’s January earnings call with investors. Sarandos said he believes the deal will secure regulatory approval, arguing that it will preserve jobs at a time of massive layoffs across the media “because this deal is pro-consumer… pro-innovation, pro-worker.”