WBD Opens Talks With Paramount

Warner Bros. Discovery (WBD) announced Tuesday that it has received a revised takeover offer from Paramount Skydance (PSKY) at $31 per share in cash, up from its prior $30 per share bid. The board determined this revised proposal "could reasonably be expected to lead" to a superior offer compared to the existing deal with Netflix for WBD's studios and HBO Max streaming service.

The Netflix agreement remains in effect, and the board continues to recommend it to shareholders. WBD advised shareholders not to take any action regarding Paramount's amended tender offer at this time. If WBD's board ultimately deems Paramount's bid superior, Netflix would have a four-day window to match or improve its offer.

Paramount's updated proposal includes:

• $31 per share cash.
• A ticking fee of $0.25 per quarter (equivalent to a daily amount) payable to shareholders starting after September 30, 2026 (earlier than the previous January 2027 start).
• A $7 billion regulatory termination fee if the deal fails due to antitrust or other regulatory issues.
• Coverage of the $2.8 billion breakup fee WBD would owe Netflix if terminating that agreement.
• Other strengthened terms, such as additional equity funding support and adjustments to material adverse effect definitions excluding linear networks performance.

Netflix's signed deal is for $27.75 per share (approximately $72-83 billion, depending on sources) covering the studios, HBO Max, and assets like Turner Classic Movies—but excludes cable networks like CNN and TNT, which WBD is spinning off into Discovery Global.

Paramount's all-company bid (including cable networks) was previously $30 per share (around $77-108 billion valuations cited variably). It aims to acquire the full entity.

WBD reopened negotiations with Paramount last week after the latter amended its bid to address concerns, including agreeing to cover the Netflix breakup fee and introducing the ticking fee. Netflix consented to the seven-day negotiation window.

Netflix has publicly defended its offer as superior, with Co-CEO Ted Sarandos highlighting benefits for shareholders and the industry in recent interviews.

Both potential deals face regulatory scrutiny in the U.S. and internationally, including a Justice Department review that Netflix describes as standard (though reports suggest examination of potential anticompetitive issues).