David Ellison Adds New Sweeteners In Hostile Paramount Megadeal Bid For Warner Bros.
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Paramount has upped its offer for Warner Bros. Discovery with a fee for shareholders and a promise to pay a $2.8 billion termination fee.
Per a filing Tuesday, Paramount will continue to offer $30 a share to acquire Warner Bros. Discovery, but will now add a $0.25 per share “ticking fee,” which it will pay to WBD shareholders for each quarter its transaction has not closed beyond December 31, 2026.
Additionally, the company said it will pay the $2.8 billion termination fee to Netflix, which would be due if Warner Bros. ultimately rejects Netflix’s bid. (Netflix, in turn, would owe Paramount $5.8 billion if it pulls out). Paramount said it will also “offer solutions” for Warner Bros. financing costs and obligations, including paying $1.5 billion in fees associated with a debt refinancing.
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Paramount’s current offer includes an increased $43.6 billion of equity commitments from the Ellison Family and RedBird Capital Partners and $54.0 billion of debt commitments from Bank of America, Citigroup and Apollo. As of December, the offer includes a personal guarantee from Larry Ellison, father of Paramount CEO David Ellison, of $43.3 billion.
The amended offer comes as Paramount has launched a hostile bid for Warner Bros., after the studio had accepted Netflix’s all-cash $72 billion offer, or $27.75 a share, for its studios and streaming business. Paramount has since begun an appeal to WBD shareholders to reject the merger deal, calling Netflix’s bid “inferior,” and asking them to reject the Discovery spinoff and to reject the pay packages for senior WBD executives, including CEO David Zaslav.
Paramount has also extended the expiration date of its tender offer to February 20. On Feb. 9, the company said it complied with the Department of Justice’s information request related to its tender offer, which kicks off a 10-day waiting period in which regulators can respond.
“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,” David Ellison said in the offer release.
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