Warner Bros. Discovery Weighs New Paramount Bid
Warner Bros. Discovery's board is considering reopening acquisition talks with Paramount Skydance Corp. after receiving a ninth, revised proposal. The new offer includes a premium for WBD shareholders of $650 million per quarter over competing bids, a structure designed to sway investors while a decision is made. The move is also seen as a tactic to potentially force a higher bid from competitor Netflix, which is also reportedly in the running for Paramount.
- This renewed bid follows a period of intense M&A activity in late 2025, where Paramount Skydance engaged in a bidding war with Netflix for WBD's assets. Initially, Netflix appeared to be the frontrunner to acquire WBD's streaming and studio divisions after its $82.7 billion offer was accepted. - Paramount Skydance countered with a hostile takeover bid for the entirety of Warner Bros. Discovery, valued at approximately $108.4 billion. The financing for this all-cash offer of $30 per share was backed by the Ellison family, RedBird Capital, and several sovereign wealth funds. - A key component of Paramount's latest offer is a "ticking fee," which would compensate WBD shareholders if the deal's closing is delayed beyond December 31, 2026. This is designed to mitigate shareholder risk and pressure Netflix, whose own deal for WBD's assets is already facing intense antitrust scrutiny from the Department of Justice. - The renewed talks signal a potential shift in strategy for WBD's board, which had previously rejected multiple offers from Paramount Skydance in favor of the Netflix deal. This change may be influenced by pressure from activist investors like Ancora Holdings Group, who have advocated for engagement with Paramount. - From a deal structure perspective, Paramount's interest is in acquiring all of Warner Bros. Discovery, including its cable networks like CNN and TNT. In contrast, the Netflix agreement is structured to acquire only the Warner Bros. studio and HBO Max streaming service. - The backdrop for this potential mega-merger is a more lenient regulatory environment in 2026, which has spurred a wave of large-scale media consolidation as companies seek scale to compete in the global streaming market. - Both companies carry significant debt loads that would need to be addressed in any potential merger. As of their latest reports, Warner Bros. Discovery had gross debt of $34.5 billion, while Paramount Global had gross debt of $13.6 billion. - Prior to this bidding war for WBD, Shari Redstone, the controlling shareholder of Paramount's parent company National Amusements, had been exploring a sale of her family's stake, with Skydance Media being a preferred partner in a deal that ultimately fell through.
