*Courtesy of Tom Williams/CQ-Roll Call, Inc via Getty Images.*

David Ellison’s Paramount Skydance has sweetened its hostile bid for Warner Bros. Discovery (WBD), adding financial incentives as it tries to derail Netflix’s pending deal.

Paramount said it will pay WBD shareholders an extra 25 cents per share — about $650 million per quarter — for every quarter the deal remains unclosed after Dec. 31, 2026. The “ticking fee” signals Paramount’s confidence that its transaction would face fewer regulatory obstacles than Netflix’s. Paramount has argued that Netflix’s ownership of HBO Max would create excessive concentration in streaming, a claim Netflix disputes, noting its U.S. TV viewing share would still trail YouTube.

Under the revised terms, Paramount would:

Cover the $2.8 billion breakup fee owed to Netflix if shareholders accept its $30-per-share all-cash offer.
Eliminate WBD’s potential $1.5 billion debt exchange costs by backstopping the offer and reimbursing shareholders if regulators block the deal, without reducing the $5.8 billion reverse-termination fee.
Extend its tender offer to March 2, 2026.

WBD’s board said it will review the new proposal but continues to recommend Netflix’s $27.75-per-share agreement, signed in December. The board has rejected Paramount’s prior approaches eight times.

Paramount’s amended offer values WBD at about $108 billion and is backed by $43.6 billion in equity from Larry Ellison and RedBird Capital, plus $54 billion in debt financing from major banks including Bank of America, Citigroup and Apollo. The package includes a $43.3 billion personal guarantee from Larry Ellison.

Paramount also pledged to:

Support refinancing or extension of WBD’s $15 billion bridge loan.
Match Netflix’s interim operating covenants.
Work with WBD on safeguards tied to Discovery Global, its planned 2026 spin-off of linear networks such as CNN and TNT.

Paramount argues that, once Discovery Global’s projected $17 billion debt load is factored in, the effective value of Netflix’s offer could fall to about $26.75 per share — making its own $30 cash bid roughly 12% higher.

The company said it has made progress on regulatory approvals, including compliance with a Department of Justice information request and clearance from German authorities.

TRENDING NEWS