Glass Lewis backs Paramount deal

A firm most people never hear about just made the April 23 shareholder vote a lot harder to dismiss. Glass Lewis told Warner Bros. Discovery investors to back the sale to Paramount Skydance, and those recommendations often guide how big fund managers cast proxy ballots. (usnews.com, glasslewis.com) The deal on the table pays Warner Bros. Discovery shareholders $31 a share in cash. Paramount Skydance says that price values Warner Bros. Discovery at an enterprise value of $110 billion once debt is included. (paramount.com, nbcnews.com) This was not the first ending Warner Bros. Discovery planned. On February 17, the company was still telling shareholders to vote for a Netflix merger, and only then opened a seven-day window for Paramount Skydance to come back with a better final offer. (wbd.com) Nine days later, on February 27, Paramount Skydance won. The signed agreement would put Warner Bros., HBO Max, CNN and the company’s cable networks under the same roof as Paramount’s film studio, CBS, Nickelodeon and the old Skydance business. (paramount.com, nbcnews.com) That creates a library built for scale, not just prestige. Reuters said the combined group would bundle franchises including Game of Thrones, Harry Potter and Mission: Impossible, while Paramount’s own announcement added Top Gun, the DC Universe and SpongeBob SquarePants. (usnews.com, paramount.com) Glass Lewis backed the merger for a plain reason: cash now beat the alternatives. Reuters reported that the adviser said the offer gave Warner Bros. Discovery holders “immediate and certain cash value” that looked better than the prior Netflix path, even after weighing antitrust risk. (usnews.com) But Glass Lewis did not give management a blank check. The same report said shareholders should reject the golden-parachute package tied to the sale, including a payout that could send Chief Executive David Zaslav up to $887 million. (usnews.com) The merger vote and the pay vote are separate levers. Investors can say yes to Paramount Skydance buying the company and no to the severance terms, which is exactly the split recommendation Glass Lewis made. (usnews.com) The next obstacle is Washington, not Wall Street. Reuters reported that the United States Department of Justice has already sent subpoenas as part of its investigation, and NBC News said Paramount Skydance agreed to a $7 billion reverse termination fee if regulators kill the deal. (usnews.com, nbcnews.com) Paramount Skydance is also paying for time if the closing slips. Under the merger agreement, if the transaction is still not done by September 30, 2026, Warner Bros. Discovery shareholders start collecting a ticking fee of 25 cents a share each quarter until it closes. (paramount.com, usnews.com) So the vote on April 23 is no longer just a test of whether investors like a Hollywood mega-merger. It is now a narrower question: whether shareholders want $31 a share from Paramount Skydance badly enough to back the sale while regulators decide if one company can own that much film, television, streaming and news at once. (paramount.com, usnews.com, nbcnews.com)