Mumbai: In a dramatic escalation of one of Hollywood’s biggest takeover battles, Warner Bros. Discovery (WBD) confirmed Tuesday that its board will formally review an amended hostile tender offer from Paramount Skydance, even as it maintains its current recommendation in favor of its existing merger agreement with Netflix.
The unsolicited all-cash offer from Paramount Skydance, led by David Ellison, raises the stakes in WBD’s high-profile sale process by introducing additional financial commitments aimed at strengthening the proposal’s certainty and appeal to shareholders.
WBD said its board, “consistent with its fiduciary duties and in consultation with independent financial and legal advisors,” will carefully evaluate the revised bid in accordance with the terms of its merger agreement with Netflix. For now, however, the company is not altering its recommendation supporting the Netflix transaction. A formal response to Paramount’s amended proposal is expected within 10 business days.
The board also advised shareholders not to take any action at this time.
Paramount Sweetens the Deal
Paramount Skydance’s revised proposal retains its $30 per share all-cash offer for WBD but layers on several additional assurances designed to address regulatory, financing and execution risks.
Among the key enhancements is a “ticking fee” provision under which WBD shareholders would receive an additional $0.25 per share — approximately $650 million in aggregate — for every quarter the deal remains unclosed beyond December 31, 2026. The move is intended to underscore confidence in regulatory clearance timelines.
Paramount also committed to funding the $2.8 billion termination fee payable to Netflix should WBD’s board ultimately accept the superior proposal. Further, it pledged to eliminate up to $1.5 billion in potential financing costs tied to WBD’s debt exchange offer by fully backstopping the transaction and reimbursing shareholders if the exchange fails and the deal does not close.
The company said its financing package has been expanded to include $43.6 billion in equity commitments from the Ellison family and RedBird Capital Partners, alongside $54 billion in debt commitments from Bank of America, Citigroup and Apollo. Paramount’s offer carries no financing condition and includes a personal guarantee from Larry Ellison covering the equity financing as well as potential damages.
Additionally, Paramount signaled flexibility on interim operating covenants and offered to match comparable restrictions contained in the Netflix agreement. It also expressed willingness to negotiate protections related to potential deterioration in WBD’s linear television business.
Regulatory Momentum
Paramount said it has certified compliance with the U.S. Department of Justice’s “Second Request” related to antitrust review, triggering a 10-day waiting period under federal regulations. It has also secured foreign investment clearance in Germany and stated that discussions with global regulators are ongoing.
The company has positioned its bid as pro-competitive and supportive of creative talent and theatrical exhibition, arguing that the transaction would strengthen traditional Hollywood studios amid mounting pressure from streaming and technology giants.
Contrast With Netflix Transaction
Paramount’s campaign has increasingly focused on drawing contrasts with WBD’s agreed transaction with Netflix, which involves a complex structure combining cash consideration and equity in a spun-off entity, Discovery Global.
According to Paramount, the amount of cash WBD shareholders would ultimately receive under the Netflix deal depends on Discovery Global’s debt capacity at separation. Paramount has argued that achieving the high end of the projected consideration range would require placing $17 billion of debt on Discovery Global — an assumption it characterizes as aggressive given market comparables.
Paramount estimates that, under more conservative leverage and valuation assumptions aligned with industry peers, the total value of the Netflix package could fall meaningfully below its fixed $30 per share cash bid.
WBD has not publicly revised its position on the Netflix transaction, but the board’s review of the enhanced Paramount proposal underscores mounting shareholder and market scrutiny.
Proxy Battle Brewing
The contest appears headed toward a shareholder showdown. Paramount has indicated it will solicit proxies against approval of the Netflix transaction at WBD’s upcoming special meeting and has previously signaled intentions to run a competing director slate at WBD’s 2026 annual meeting.
With billions in termination fees, debt assumptions and regulatory hurdles at stake, the battle for control of Warner Bros. Discovery has evolved into a broader referendum on Hollywood’s strategic future — pitting an all-cash certainty play against a complex restructuring bet tied to the prospects of a declining linear television business.
For now, WBD’s board remains officially aligned with Netflix. But the clock is ticking, and shareholders are poised to play the deciding role in one of the industry’s most consequential takeover fights.
