Paramount Skydance confirmed that Warner Bros. Discovery has notified the company that WBD’s Board of Directors has determined Paramount’s $31 per share, all-cash proposal to acquire WBD qualifies as a “Company Superior Proposal” under the terms of WBD’s existing merger agreement with Netflix. The Paramount Skydance offer to acquire Warner Bros. Discovery is widely reported to be valued at about $111 billion, including the company’s debt and other financial terms, not just the $31-per-share price.
The determination marks a significant development in Paramount’s pursuit of WBD, positioning its offer ahead of WBD’s previously announced transaction with Netflix. The proposed transaction would result in Paramount acquiring 100% of WBD for $31.00 per share in cash.
David Ellison, Chairman and CEO of Paramount, said the board’s decision reinforces the strength of the proposal, emphasizing the value, certainty, and speed to closing offered to WBD shareholders.
Under the terms outlined by Paramount, WBD shareholders would receive $31.00 per share in cash. A daily ticking fee equivalent to $0.25 per quarter would accrue after September 30, 2026, until the transaction is completed. Paramount’s proposal also includes a $7 billion regulatory termination fee payable if the deal fails to close due to regulatory matters.
Paramount has committed to covering the $2.8 billion termination fee WBD would owe Netflix to exit its current merger agreement. In addition, the proposal eliminates WBD’s potential $1.5 billion financing cost associated with its previously announced debt exchange offer. The definition of “Company Material Adverse Effect” in the proposed agreement would exclude performance of WBD’s Global Linear Networks business.
To support the transaction, the Ellison Trust is providing a $45.7 billion equity commitment, with Larry Ellison guaranteeing the commitment and agreeing to contribute additional equity if necessary to satisfy solvency requirements set by Paramount’s lending banks. Bank of America Merrill Lynch, Citi, and Apollo are providing a $57.5 billion debt commitment.
Completion of the transaction remains subject to the expiration of a four-business-day match period, termination of the Netflix merger agreement, and execution of a definitive merger agreement between Paramount and WBD.
Paramount, a Skydance Corporation, is a global media and entertainment company operating across Studios, Direct-to-Consumer, and TV Media segments. Its portfolio includes Paramount Pictures, Paramount Television, CBS, CBS News, CBS Sports, Nickelodeon, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance’s animation, film, television, interactive, games, and sports divisions.
Support: Centerview Partners LLC and RedBird Advisors are serving as lead financial advisors to Paramount, with Bank of America Securities, Citi, M. Klein & Company, and LionTree also acting as financial advisors. Cravath, Swaine & Moore LLP and Latham & Watkins LLP are serving as legal counsel.
KEY QUOTES:
“We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing.”
David Ellison, Chairman And CEO Of Paramount Skydance Corporation
