WBD takeover: Paramount adds 'ticking fee' to all-cash bid battle

Paramount has revised its offer for Warner Bros. Discovery, adding a 25-cent per share quarterly "ticking fee" to its USD 30/share all-cash bid. The company will also fund the USD 2.8 billion termination fee payable to Netflix.

Paramount Revises WBD Offer with 'Ticking Fee'

Amid the ongoing takeover battle to acquire Warner Bros. Discovery (WBD), Paramount has revised and enhanced its offer, adding a 25-cent per share "ticking fee" to strengthen its all-cash bid. In an official statement on Tuesday, Paramount said it has introduced an incremental cash consideration of USD 0.25 per share for every quarter that the transaction does not close beyond December 31, 2026.

The ticking fee, equivalent to around USD 650 million in cash value each quarter, will be payable to WBD shareholders. It stated "Paramount has enhanced its offer with a USD 0.25 per share "ticking fee," payable to WBD shareholders for each quarter its transaction has not closed beyond December 31, 2026.......Paramount will fund USD 2.8 billion termination fee payable to Netflix and offers solutions to WBD's debt financing costs and obligations".

Comparing the Bids

Paramount, in the latest statement, also reiterated that its USD 30 per share all-cash offer provides superior value compared to Netflix's proposed transaction. According to WBD's preliminary proxy statement filed with the US Securities and Exchange Commission on February 9, Netflix's merger consideration ranges from a minimum of USD 21.23 to a maximum of USD 27.75 per share in cash, depending on debt levels at Discovery Global at the time of separation.

Addressing Financial Concerns

The company said it will fully fund the USD 2.8 billion termination fee payable to Netflix upon termination of the Netflix agreement. Paramount has also offered solutions to address WBD's debt-related concerns, including eliminating the potential USD 1.5 billion financing cost linked to WBD's debt exchange offer. Paramount will fully reimburse shareholders for this amount if the exchange is unsuccessful and the transaction does not close.

To further enhance certainty, Paramount said its financing sources are prepared to refinance or extend the maturity of WBD's existing USD 15 billion bridge loan, with any incremental costs covered by Paramount. The company also committed to providing interim operating flexibility by matching any comparable covenants agreed between Netflix and WBD.

Paramount's Appeal to Shareholders

Paramount urged the WBD Board to engage with its revised proposal and said it will solicit proxies against the Netflix transaction at WBD's upcoming special shareholder meeting, calling its own offer transparent, certain and superior for shareholders.

Background of the Takeover Battle

The issue is in discussion due to a takeover battle for Warner Bros. Discovery (WBD), the parent company of HBO, DC Studios, and CNN. The conflict began in late 2025 when Netflix reached a "friendly" agreement to acquire WBD's premium content and streaming assets for approximately USD 83 billion. This deal was designed to merge the two streaming giants while spinning off WBD's older cable networks into a separate entity. However, the situation turned into a bidding war when Paramount Global (recently merged with Skydance Media) launched a massive counter-offer of USD 108.4 billion to buy the entire company outright, including the cable channels Netflix intended to leave behind.

So far, the battle has been characterised by intense legal and financial maneuvering. While the WBD board originally favoured the Netflix deal, Paramount has "sweetened the pot" to win over shareholders. On February 10, Paramount pledged to cover the USD 2.8 billion breakup fee WBD would owe Netflix for backing out, while also offering a "ticking fee" to pay shareholders extra cash if the deal faces long regulatory delays. (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)