Paramount has made another move in its effort to acquire Warner Bros. Discovery, changing the deal structure to make its offer more attractive. The company is keeping its $30-per-share all-cash offer, which values WBD at close to $78 billion and about $108 billion including debt, but it has added new assurances aimed at reducing risk for shareholders. Paramount now says it will cover the $2.8 billion breakup fee owed to Netflix if Warner ends its existing deal, as well as other potential costs tied to financing and delays. By taking on these obligations itself, Paramount is trying to present its offer as a cleaner and more secure alternative, especially at a moment when Warner’s board continues to back Netflix’s proposal.
Along with absorbing the Netflix termination payment, Paramount has expanded its proposal to address several financial pressure points that have concerned Warner’s board and investors. One of the most significant additions is a ‘ticking fee’ designed to compensate shareholders if the transaction takes longer than expected to close. Under the revised terms, Paramount would begin paying Warner shareholders $0.25 per share for every quarter the deal remains unfinished after the end of 2026. Given WBD’s share count, that provision would translate into around $650 million per quarter, turning regulatory or procedural delays into a direct cash benefit for investors.
Paramount has also committed to covering up to $1.5 billion in potential financing-related costs tied to Warner’s existing capital structure. Those costs could arise if Warner’s planned debt exchange or refinancing, which is linked to its current agreement with Netflix, fails to close. The revised offer retains a sizable reverse termination fee that would be payable by Paramount if it fails to complete the acquisition under certain conditions. That fee, valued at about $5.8 billion, is intended to back Paramount’s confidence in its financing and regulatory strategy. Notably, reverse breakup fees of that scale are uncommon and are generally used to signal strong deal certainty in complex, high-value transactions.
So far, Paramount’s bid has taken the form of a tender offer directly to WBD shareholders, bypassing the board. Initial results showed limited shareholder participation, well short of the threshold needed to gain control, prompting Paramount to extend its tender deadline. Paramount has also escalated the fight by taking WBD to court, filing a lawsuit that seeks greater disclosure around the terms and valuation of Netflix’s $82.7 billion proposal, arguing that shareholders need clearer information to properly assess the competing bids.
In parallel, Netflix’s offer was recently simplified into an all-cash structure to give shareholders clearer visibility into the final payout. Warner’s board has repeatedly said it views the Netflix deal as offering greater certainty, particularly given the scale of Paramount’s financing needs and the regulatory scrutiny that any full takeover of Warner would face.