Paramount Skydance has amended its bid for Warner Bros Discovery (WBD) by adding a ‘ticking fee’ and offering to cover the $2.8bn that WBD would need pay to get out of its agreement with rival bidder Netflix.
In addition, the expiration date of Paramount’s bid has been extended from February 20 to March 2.
Though the Paramount bid for the whole of WBD remains at $30-a-share, the ticking fee would bring WBD stockholders an extra $0.25 per share for each quarter after the end of this year that the deal has not closed, equivalent to approximately $650m each quarter.
In a statement, Paramount said the fee underscores its “confidence in the speed and certainty of regulatory approval for its transaction.”
In a letter to the WBD board, Paramount also said it will eliminate a $1.5bn financing cost associated with its offer and, if necessary, bring its own financing sources in to extend WBD’s existing $15bn bridge loan.
The latest Paramount move comes three weeks after Netflix changed its offer for the Warner Bros film and TV studio and HBO Max to an all-cash deal of $27.75 a share. WBD shareholders are set to vote on that deal at a special meeting sometime in April.
In a statement detailing Paramount’s latest moves, studio chairman and CEO David Ellison said: “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.”
Responding to the Paramount moves, the WBD board said in a statement that it “will carefully review and consider Paramount Skydance’s offer in accordance with the terms of WBD’s agreement with Netflix.”
“The Board is not modifying its recommendation with respect to the Netflix Merger Agreement,” the statement added. “WBD will review the amended tender offer and advise its stockholders of the Board’s recommendation after the completion of that review.
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