Paramount, a major film studio, has taken a fresh swing at a hostile takeover of Warner Bros. Discovery, offering a bundle of perks that could tip the scales in its favor and keep the company from falling into the hands of a rival streaming giant.
First, Paramount will shoulder the $2.8 billion termination fee that Warner would owe if it backs out of its already‑signed agreement with the streaming service. The studio will also backstop a refinancing of Warner’s debt and cover up to $1.5 billion in related fees, should that refinancing be needed.
To signal confidence that regulators will green‑light the deal swiftly, Paramount added a “ticking fee” of 25 cents per share for every quarter the transaction isn’t completed after December 31. The offer remains a $30‑per‑share all‑cash bid, with no change to that base price.
Warner, however, has voiced concerns that the combined company would carry too much debt. Analysts say the board is unlikely to entertain the proposal unless the base bid is raised to at least $32 a share.
Despite that, both Paramount’s and Warner’s stock ticked up about 1.7% after the announcement, while the streaming giant’s shares jumped 3.5%, suggesting investors who prefer a different outcome are pleased to see a stronger counter‑offer.
The studio’s push has been underway for months. Warner’s board had previously agreed to sell its studios and streaming service to the streaming giant for $27.75 a share, a deal valued at $82.7 billion. Warner will ask shareholders to vote on that transaction by April.
Regulatory pressure is also part of Paramount’s strategy. The studio has complied with a second request for information from the Justice Department, triggering a 10‑day period during which regulators can respond—an opportunity Paramount hopes to use as evidence of government approval.
Funding for the bid is robust. Paramount has pledged $43.6 billion in equity from key partners and plans to borrow an additional $54 billion from major banks and a global investment firm.
While the enhanced terms add roughly $1.79 a share to cover the new commitments, the deal still faces hurdles. Whether Paramount’s sweetened offer will finally persuade Warner’s board remains to be seen, but the studio’s aggressive strategy underscores how much is at stake in the entertainment world.
