Paramount Skydance has amended its $30 per share, all-cash tender offer to acquire Warner Bros Discovery (WBD) with enhancements that it says “surpass the standard needed for the WBD Board to engage on Paramount’s superior proposal”.

Paramount added that its enhanced offer provides definitively superior value and certainty.

To underscore confidence in the speed and certainty of its regulatory pathway, Paramount is adding an incremental cash consideration to WBD shareholders of $0.25 per share – equivalent to approximately $650 million cash value each quarter – for every quarter the transaction is not closed beyond December 31st 2026.

Paramount will fund the payment of the $2.8 billion termination fee due to Netflix concurrent with the termination of the Netflix agreement as set forth in the revised proposed merger agreement filed with the amended tender offer.

Paramount said it will eliminate WBD’s potential $1.5 billion financing cost associated with its debt exchange offer by fully backstopping an exchange offer that relieves WBD of its contractual bondholder.

To provide WBD shareholders further certainty of closing, Paramount is open to discussing with the WBD Board of Directors contractual solutions to account for the possibility of continuing deteriorating financial performance beyond what WBD is currently projecting for its linear network business.

Paramount’s amended offer is fully financed by an increased $43.6 billion of equity commitments from the Ellison Family and RedBird Capital Partners and $54 billion of debt commitments from Bank of America, Citigroup and Apollo.

As with Paramount’s December 2025 offer, Paramount’s financing includes an irrevocable personal guarantee from Larry Ellison of $43.3 billion, covering the equity financing for Paramount’s amended offer as well any damages claims against Paramount.

In sharp contrast to the value and regulatory certainty provided by Paramount’s offer, the Netflix deal asks WBD shareholders to approve a transaction where they do not have any idea how much actual cash consideration they will receive, since it is predicated upon the financial condition of Discovery Global at the time of separation and its resulting debt capacity.

Under the Netflix merger agreement, WBD would need to place $17 billion in debt on Discovery Global at time of separation to achieve the high end of the merger consideration range, if the separation were to occur on June 30th, 2026. WBD has not provided WBD shareholders any financial information about Discovery Global to demonstrate that Discovery Global could support that quantum of debt.

Discovery Global’s closest comparable company, Versant Media, debuted this January with ~1.25x net leverage. Versant began trading at ~4.5x EV / EBITDA and has since seen its multiple contract to ~3.5x EV / EBITDA. At this valuation multiple, Discovery Global would have no equity value. For reference, WBD’s own financial advisors produced a discounted cash flow analysis that yielded a low of just 72 cents per share.

Based upon Paramount’s analysis, if Discovery Global is spun off with leverage in line with Versant, the Netflix cash consideration would be reduced to $23.20 per share. Assuming both a multiple and leverage ratio in line with Versant, Discovery Global’s equity value would be ~$3.55 per share, resulting in a total package value of only ~$26.75 for the Netflix deal. Paramount’s $30.00 all-cash offer is 12% higher.

David Ellison, Chairman and CEO of Paramount, commented: “The additional benefits of our superior $30 per share, all-cash offer clearly underscore our strong and unwavering commitment to delivering the full value WBD shareholders deserve for their investment. We are making meaningful enhancements – backing this offer with billions of dollars, providing shareholders with certainty in value, a clear regulatory path, and protection against market volatility.”

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Categories: Business, Headline, M&A

Tags: netflix, paramount, WBD