David Ellison Enhances Paramount Bid in Aggressive Warner Bros. Megadeal
Paramount has made a significant move to enhance its bid for Warner Bros. Discovery. This revised offer now includes additional financial incentives for shareholders and addresses potential financing needs.
Details of Paramount’s Enhanced Offer
As part of its updated bid, Paramount will continue to propose $30 per share for Warner Bros. Discovery. In a noteworthy addition, it has introduced a $0.25 per share “ticking fee.” This fee will apply for each quarter after December 31, 2026, until the deal is concluded.
Paramount is also prepared to pay a termination fee of $2.8 billion to Netflix. This fee would be triggered if Warner Bros. opts to reject Netflix’s competing $72 billion all-cash offer. If Netflix withdraws its bid, it would be liable to Paramount for $5.8 billion.
Financial Commitments
The current proposal includes boosted equity commitments totaling $43.6 billion. This amount is backed by the Ellison Family and RedBird Capital Partners. Furthermore, Paramount has outlined $54.0 billion in debt commitments from major financial institutions such as Bank of America, Citigroup, and Apollo.
- Equity commitments: $43.6 billion
- Debt commitments: $54.0 billion
- Termination fee to Netflix: $2.8 billion
- Netflix’s potential liability to Paramount: $5.8 billion
Additionally, Larry Ellison, the father of Paramount CEO David Ellison, guarantees $43.3 billion of this offer.
Paramount’s Strategic Position
This enhanced offer follows a hostile bid launched by Paramount after Warner Bros. Discovery accepted Netflix’s offer, priced at $27.75 per share. Paramount is actively appealing to Warner Bros. shareholders to reject Netflix’s proposal, labeling it as “inferior.” The company has also urged shareholders to oppose the Discovery spinoff and high executive compensation packages.
Moreover, Paramount has extended the expiration date of its tender offer to February 20. On February 9, it confirmed compliance with the Department of Justice’s information request regarding its tender offer.
Commitment to Shareholders
David Ellison stated, “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.” He emphasized that Paramount is enhancing the offer with billions in backing, providing a stable regulatory pathway, and offering protection against market fluctuations.
As the situation evolves, Warner Bros. is set to review this amended proposal, although it has not yet changed its recommendation in favor of the Netflix deal.
