Paramount Revises WBD Bid With Delay Payouts, Covers Netflix Breakup Fee
Paramount adds an extra 25 cents per share per quarter for delays to make the deal attractive to Warner Bros Discovery shareholders...
Paramount Vs. Netflix has taken another turn with Paramount, making sweet changes to its offer. WBD currently has a pending deal with Netflix ($27.75 per share, all-cash) valued at $72 billion. It appears Paramount is unwilling to let WBD go without a fight. Paramount has now introduced a “Ticking fee” in its deal. However, there's no change (or raise) in its original $30 per share price to take over all of WBD. The company is willing to pay a penalty of 25 cents per share per quarter for delays. Therefore, if government approvals take longer than expected, WBD shareholders get paid extra. What's more to the new deal? Is Paramount financially capable of this? What is Paramount’s leadership saying? For all that, learn more.
Paramount’s Sweetened Offer to WBD
A “Ticking fee” to compensate for any delays in payment. For instance, Paramount is offering 25 cents per share paid for every quarter the deal is delayed. This benefit starts on December 31, 2026. The company also assured shareholders that it would pay them a premium if regulators took too long to approve the merger.
And this equals about $650 million in cash per quarter overall. Not just that, Paramount says it would cover the $2.8 billion WBD paid to Netflix as a breakup fee (in the event WBD drops Netflix). It would also eliminate the $1.5 billion debt refinancing cost.
Is Paramount Financially Capable of This?
According to Paramount, it is fully funded and ready with the cash. The money will come from:
| Funding Category | Amount | Contributors |
|---|---|---|
| Equity | $43.6 billion | Ellison family, RedBird Capital Partners |
| Debt | $54 billion | Bank of America, Citigroup, Apollo |
What Is Paramount’s Leadership Saying About the Wbd’s Deal?
According to CEO David Ellison, Paramount's offer gives certainty, protects shareholders from market ups and downs and has a clear regulatory path. At the same time, RedBird’s Gerry Cardinale says that these changes have removed “small excuses” WBD might use to avoid talks. And he believes that WBD’s board has no good reason not to proceed with the deal.
Final Thoughts…
Paramount is determined and clearly wants to pursue all options to secure the WBD deal. There’s no official comment from WBD on this yet. Keep in touch for more updates.
Pratyusha Srivastava
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