Paramount‑Skydance takeover advances

A merger that still needs a shareholder vote just got a big green light from the people many fund managers listen to most: Institutional Shareholder Services told Warner Bros. Discovery investors to vote for the sale, even while calling the executive payouts excessive. (deadline.com) That split matters because Institutional Shareholder Services is not management, a court, or a regulator. It is a proxy adviser that tells big investors how to vote on deals, board seats, and pay packages before meetings like Warner Bros. Discovery’s April 23 special vote. (deadline.com) (ir.wbd.com) The deal itself is simple on paper and huge in size: Paramount Skydance agreed on February 27 to buy Warner Bros. Discovery for $31 a share in cash. Paramount said the combination would create a larger film, television, and streaming company under David Ellison. (paramount.com) (stocktitan.net) Warner Bros. Discovery’s board is backing it hard because $31 is far above where the stock traded before the talks became public. The company’s merger proxy says the cash offer represented a 147 percent premium to the last unaffected closing price of $12.54. (stocktitan.net) The part that set off alarms was not the sale price. It was the side payments for top executives, with Deadline reporting that merger-related compensation totals about $1.35 billion and that David Zaslav’s package drew particular criticism from Institutional Shareholder Services. (deadline.com) So investors are being asked to separate two questions that usually get tangled together. One question is whether $31 cash is a good exit for shareholders, and the other is whether management should collect parachutes large enough to trigger a public rebuke from the same adviser backing the merger. (deadline.com) (stocktitan.net) Then came the financing piece, which is where shaky deals often fall apart. Paramount Skydance has now secured commitments of nearly $24 billion from sovereign wealth funds tied to Saudi Arabia, Qatar, and Abu Dhabi to help fund the takeover, according to Variety and Reuters. (variety.com) (money.usnews.com) That does not mean the money alone closes the deal, but it answers the most basic buyer question: can Paramount Skydance actually pay for a transaction this large. Reuters said the Gulf commitments were meant to help back Paramount’s roughly $81 billion takeover of Warner Bros. Discovery, while some market reports framed the combined enterprise value closer to $111 billion once debt is included. (money.usnews.com) (fxleaders.com) That is why the mood around the vote changed this week. A deal can survive anger over executive pay more easily than it can survive doubts about financing, and right now Paramount Skydance has fewer financing doubts and Warner Bros. Discovery management has more pay scrutiny. (deadline.com) (variety.com) If shareholders approve on April 23, the fight moves from persuasion to execution. The remaining work is getting the transaction through the closing process, with Warner Bros. Discovery’s proxy also spelling out a small daily “ticking” payment after September 30, 2026 if the closing drags on. (ir.wbd.com) (stocktitan.net) So the picture now is unusually clean. The sale price has a major proxy adviser’s support, the funding looks firmer after the Gulf commitments, and the loudest remaining objection is not whether the merger should happen but how much the people leaving with it should get paid. (deadline.com) (variety.com)