Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Paramount has sweetened its $108bn hostile bid for Warner Bros Discovery, offering shareholders an additional “ticking” fee that will compensate them if regulators delay completion of the transaction.
Under the revised terms, tied to its $30-a-share all-cash offer, WBD investors would receive an extra $0.25 per share — about $650mn — in quarterly payments should the deal fail to close by the end of 2026, shifting some regulatory risk back on to Paramount.
The move is the latest attempt by Paramount, led by David Ellison, to gatecrash Netflix’s agreed $83bn deal with WBD for its studio and streaming assets, raising the stakes in a high-profile battle for control of one of Hollywood’s most coveted content libraries.
Paramount said its enhanced proposal underscored its confidence in securing approvals, as antitrust scrutiny of mega-media combinations intensifies on both sides of the Atlantic.
The group added that it would pay the $2.8bn termination fee that WBD would owe Netflix if shareholders instead chose its offer.
However, Paramount stopped short of raising its offer for WBD — a move that analysts say is necessary to sway more shareholders.
WBD’s board last month rejected Paramount’s bid, calling it “inadequate”. People close to Paramount said that the option to raise its price remained firmly on the table.
WBD shareholders were likely to vote on the Netflix deal in March, CNBC reported. If Paramount decides to increase its bid, it would probably do so before the shareholder vote, said people briefed about the matter.
Netflix last week faced scrutiny from lawmakers in Washington, where co-chief executive Ted Sarandos pushed back on accusations from Republican senators that his company had a political agenda in its acquisition of WBD.
Republicans including Ted Cruz and Josh Hawley spent much of the anti-trust hearing accusing Netflix of promoting “woke” programming.
The US Department of Justice has also launched an antitrust review of Netflix’s deal in recent weeks. The antitrust enforcers have asked industry participants, including rivals, whether Netflix could potentially yield monopoly power if its takeover of WBD went through.
Netflix has argued that it competes not only with other Hollywood groups but with online platforms such as YouTube. “YouTube is not just cat videos anymore,” Sarandos told lawmakers. “YouTube is TV.”