Paramount Intensifies Warner Bros. Discovery Bid with New Incentives, Faces Declining Shareholder Support
Paramount Global is escalating its efforts to acquire Warner Bros. Discovery (WBD), offering a “ticking fee” and pledging to cover potential breakup costs related to a competing Netflix deal, as it struggles to secure sufficient shareholder backing.
Paramount’s revised offer, announced Tuesday, includes a payment of 25 cents per share – totaling $650 million per quarter – if the acquisition isn’t finalized by the end of the year. The company has also committed to funding Warner’s potential $2.8 billion payout to Netflix should the proposed merger between the two fall through.
The core of Paramount’s offer remains at $30 per share, extended to a new deadline of March 2 for shareholders to tender their shares. According to Paramount CEO David Ellison, these “additional benefits” demonstrate a “strong and unwavering commitment to delivering the full value WBD shareholders deserve for their investment.”
Paramount’s ambition is a complete takeover of Warner Bros. Discovery, valued at $77.9 billion, with a total enterprise value reaching $108 billion when including debt. This encompasses not only the studio and streaming assets but also Warner’s extensive network portfolio, including CNN and Discovery.
However, gaining control is proving challenging. Recent disclosures reveal a significant decline in tendered shares. As of Monday, Paramount reported that approximately 42.3 million Warner shares had been tendered, a substantial drop from the over 168.5 million shares recorded on January 21. With roughly 2.48 billion shares outstanding, Paramount needs to secure over 50% to effectively gain control of WBD.
This is the third extension of Paramount’s tender offer, and further delays are possible. The company is simultaneously pursuing a proxy solicitation to challenge Warner’s existing agreement with Netflix.
Warner Bros. Discovery acknowledged receipt of the amended offer on Tuesday, stating its board would review the proposal but reaffirmed its current recommendation to proceed with the Netflix deal. Netflix has yet to publicly comment on the latest developments.
The proposed merger between Warner Bros. Discovery and Netflix, initially agreed upon in December, involves an all-cash transaction valued at $72 billion, with an enterprise value of approximately $83 billion, or $27.75 per share. Warner and Netflix maintain that their agreement offers greater value than Paramount’s bid.
Paramount disputes this claim, highlighting a “sliding scale” payout associated with the Netflix merger, which could range from $21.23 to $27.75 per share, contingent on Warner’s debt and the spinoff of its networks business. A key distinction is that, unlike Paramount, Netflix has no interest in acquiring Warner’s networks. The agreement stipulates that “Discovery Global” would become an independent, publicly traded company prior to the merger’s completion.
The potential sale of Warner Bros. Discovery to either Paramount or Netflix has triggered substantial antitrust scrutiny from regulators worldwide. Lawmakers are urging thorough reviews of the proposed mergers, given their scale and potential impact on the media landscape. The U.S. Department of Justice has already initiated reviews of both deals, and all three companies have confirmed ongoing communication with the DOJ regarding information requests.
Paramount reported securing regulatory clearance for its tender offer from German authorities last month, but further international reviews are anticipated.
Both Paramount and its competitors argue that their proposed mergers would benefit consumers by expanding content offerings for streaming subscribers. However, unions and industry groups have voiced concerns about potential job losses and reduced content diversity resulting from further consolidation.
“.
Copyright 2026 The Associated Press. All rights reserved.
