Paramount Skydance (NASDAQ:PSKY) has aggressively escalated its pursuit of Warner Bros. Discovery, raising its all-cash takeover bid to $31 a share and prompting the target's board to determine the overture could trump an existing merger agreement with Netflix.
Paramount issued a statement welcoming the WBD board's determination, signaling its readiness to engage constructively to deliver the transaction to WBD shareholders.
The sweetened proposal represents a fortified attempt to break WBD away from Netflix.
In addition to the increased $31 per share cash price for full ownership of the media giant, Paramount has committed to absorbing the substantial costs of abandoning the existing pact.
The company reaffirmed it will cover the $2.8 billion termination fee WBD would owe its current merger partner, while also eliminating a potential $1.5 billion financing cost associated with WBD's debt exchange offer.
To further derisk the proposal for WBD and address potential completion anxieties, Paramount increased its regulatory reverse break fee to $7 billion in the event antitrust hurdles derail the acquisition.
The acquirer also accelerated the timeline for a daily ticking fee, offering 25 cents per quarter to commence after September 30, 2026, until the deal's consummation.
Furthermore, Paramount agreed to provide additional equity funding if required to support solvency certificates for its lending banks.
Notably, the revised proposal excludes the performance of WBD's Global Linear Networks business from the definition of a "Company Material Adverse Effect," effectively shielding the transaction from the secular pressures facing traditional cable television.
The path to a potential Paramount-WBD tie-up cleared a preliminary regulatory milestone recently, with the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expiring late on February 19, 2026.
To formally pivot to Paramount, the WBD board must explicitly declare the revised offer a "Company Superior Proposal."
Such a designation triggers a four-business-day matching period, allowing Netflix the opportunity to counter.
If Netflix declines or fails to outbid the Paramount offer, WBD would be cleared to terminate the Netflix agreement and execute a definitive merger agreement with Paramount.