Paramount revises bid for Warner Bros Discovery upwards

Paramount Skydance is knocking ever more forcefully on the door of Warner Bros Discovery. The David Ellison-led company has reinforced its $108 billion hostile bid for the David Zaslav-led media big. And it has done so by adding a package of financial 'assurances' designed for a single goal: to convince Warner Bros Discovery shareholders that, between the Netflix deal and the Paramount proposal, the latter is the one that really reduces the unknowns.

The pivot remains the all-cash offer of $30 per share. But the strategic move is now risk management. Aware that antitrust authorities might look askance at such a concentration of media power, Paramount has introduced a guarantee clause: a 'ticking fee'. In practice, if the deal does not close by the end of 2026 due to bureaucratic delays, Paramount will pay Wbd shareholders 25 cents per share for each quarter they wait: a figure that amounts to approximately $650 million every three months from 1 January 2027 until the deal is completed.

Not enough. Ellison's plan aims to remove any obstacles in the path of the merger. Paramount has therefore also promised to cover the $2.8 billion termination penalty that Warner Bros Discovery would have to pay to Netflix should Wbd abandon the deal already agreed with the streaming giant. A way, in short, to neutralise the psychological cost of saying 'no' to Netflix.

The package also includes the debt chapter: Paramount Skydance has said it is ready to take on 1.5 billion dollars in costs linked to a refinancing-exchange transaction on WBD's debt, fully reimbursing this fee to the shareholders without touching another umbrella clause: a 5.8 billion dollar reverse termination fee (to be paid in the "unlikely event", according to the definition given by Paramount itself in the letter sent to the WBD board, that the Paramount transaction does not close, also for regulatory reasons). In short, an offer that attempts to take off the table, one after the other, the classic objections: timing, penalties, leverage.

The setting is a high-profile contest for one of Hollywood's most coveted catalogues: studios, streaming, bookstores, franchises. It is no coincidence that among the topics that make Wbd a strategic prey are brands and narrative worlds that weigh like sovereign states: Game of Thrones, Harry Potter, the DC universe with Batman and Superman.