Paramount Skydance has intensified its effort to acquire Warner Bros. Discovery (WBD) by revising its hostile takeover bid and adding new financial incentives designed to appeal directly to shareholders. The updated proposal comes as Paramount continues its campaign to derail WBD’s existing agreement with Netflix, setting the stage for a high-profile battle over the future of one of Hollywood’s biggest media companies.
The revised offer introduces additional cash benefits intended to make Paramount’s proposal more attractive than Netflix’s competing deal. Paramount said it will pay WBD shareholders an extra 25 cents per share for every quarter the acquisition remains unfinished after Dec. 31, 2026. This recurring payment, worth an estimated $650 million in aggregate cash each quarter, is structured as a delay compensation mechanism that rewards shareholders if closing takes longer than expected.
By offering this quarterly payment, Paramount is signaling confidence that its acquisition would likely clear regulatory review more smoothly than Netflix’s plan to merge with WBD. Paramount and other critics have argued that Netflix’s ownership of HBO Max could significantly increase its influence in the subscription streaming market. Netflix has disputed that view, maintaining that even with HBO Max added to its portfolio, its share of U.S. television viewing would remain smaller than YouTube’s.
Paramount Moves to Absorb Breakup Fees and Debt Costs
A central part of Paramount’s enhanced bid is a commitment to shoulder financial risks that might otherwise discourage WBD shareholders. Paramount said it will cover the $2.8 billion breakup fee WBD would owe Netflix if shareholders choose to accept Paramount’s $30-per-share all-cash offer.
The company also pledged to eliminate a potential $1.5 billion financing expense linked to WBD’s debt exchange plans. Paramount intends to fully support an exchange arrangement that would release WBD from certain bondholder obligations. If regulators ultimately block the Paramount deal, the company has promised to reimburse shareholders for that $1.5 billion financing cost without reducing a separate $5.8 billion reverse-termination fee built into the transaction.
In addition, Paramount has extended the expiration date of its tender offer under the revised terms to March 2, 2026. WBD is expected to hold a special shareholder meeting in late March or early April to vote on the Netflix agreement, placing Paramount’s updated proposal directly in front of investors ahead of that decision.
WBD Board Continues to Back Netflix Agreement
Warner Bros. Discovery’s board said it will review Paramount’s revised offer but has not changed its recommendation that shareholders approve the Netflix transaction. The WBD board has previously rejected acquisition approaches from Paramount multiple times and continues to support Netflix’s $27.75-per-share deal, which covers Warner Bros.’ film and television studios and the HBO Max streaming service.
Paramount has formally presented its enhanced proposal to WBD’s directors in writing, emphasizing that its offer delivers a higher immediate cash value to shareholders. The company argues that its all-cash structure provides greater certainty compared with the Netflix arrangement, which involves more complex financial considerations.
Financing Backed by Major Investors and Lenders
Paramount’s updated bid values the combined transaction at roughly $108 billion and is supported by a substantial financing package. Equity commitments totaling $43.6 billion have been secured from Larry Ellison and RedBird Capital Partners. Additional debt financing of about $54 billion has been arranged through Bank of America, Citigroup, and Apollo. Sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi are also participating in support of the acquisition.
The financing includes a personal guarantee from Larry Ellison valued at $43.3 billion. This guarantee covers the equity funding required for the takeover and extends to potential damages claims related to the deal, reinforcing the financial backing behind Paramount’s bid.
Paramount also addressed WBD’s existing $15 billion bridge loan. The company said its financing partners are prepared to extend the loan’s maturity if WBD’s current lenders decline to do so, with Paramount covering any added costs. Alternatively, WBD would be allowed to structure long-term financing in a way it considers appropriate, as long as the debt can be repaid under commercially reasonable conditions.
To further ease concerns about operational disruption, Paramount pledged to provide WBD with flexibility in running its business between signing and closing. This includes matching comparable interim operating provisions that appear in Netflix’s agreement.
Debate Over Discovery Global Spin-Off
Another key issue in the takeover contest is WBD’s planned spin-off of Discovery Global, a separate company expected to house cable networks such as CNN, TNT, TBS, Food Network, and HGTV, along with Discovery+ and related assets. WBD aims to complete the spin-off in the third quarter of 2026, before finalizing the Netflix transaction. The company has projected that Discovery Global would carry net debt of $17 billion by mid-2026, gradually declining to about $16.1 billion by the end of that year.
Paramount has questioned whether that debt load is sustainable. Using comparisons to Versant Media Group, a television-focused company that recently separated from Comcast’s NBCUniversal, Paramount estimates that the effective value of Netflix’s offer could be lower than advertised once Discovery Global’s financial structure is considered. According to Paramount’s analysis, the Netflix deal could translate to a combined value of roughly $26.75 per share, below Paramount’s $30-per-share cash proposal.
Paramount argues that shareholders accepting the Netflix agreement would retain stakes in a business facing long-term pressure in the traditional cable television market while carrying significant debt.
