Paramount Engages in Talks with WBD and Shares Insights on Improved $31-Per-Share Offer

Paramount Signals Approval of Warner Bros. Discovery’s Assessment of Its Revised Offer

Paramount announced on Tuesday that it welcomes the decision by Warner Bros. Discovery’s (WBD) board to recognize the potential of its latest acquisition proposal, which includes an increased cash offer of $31 per share. The announcement followed WBD’s validation that this proposal could be considered a "Company Superior Proposal" under its existing merger agreement with Netflix.

Earlier in the day, WBD’s board officially acknowledged that Paramount’s revised offer could reasonably lead to negotiations extending beyond the initial seven-day agreement that concluded on Monday.

"Paramount welcomes WBD Board’s determination and looks forward to continuing to engage constructively with WBD to deliver the benefits of Paramount’s proposal to WBD shareholders, the creative community and consumers," stated a representative from Paramount.

Key adjustments to the offer include:

• An increase in the purchase price to $31 per WBD share, up from the previous $30 offer.
• An expedited daily "ticking fee" of $0.25 per quarter set to begin after September 30, 2026, and continuing until the completion of the acquisition.
• A heightened regulatory termination fee of $7 billion should the transaction not close due to regulatory challenges.
• An obligation to provide additional equity funding to meet the solvency requirements set forth by PSKY’s lending banks.
• A clarified “Company Material Adverse Effect” definition excluding impacts from WBD’s Global Linear Networks business, thus closing a potential loophole.
• A commitment to pay the $2.8 billion termination fee that WBD would owe to Netflix to halt its existing merger agreement.
• An agreement to alleviate WBD’s anticipated $1.5 billion financing cost related to its debt exchange offer.

Despite the ongoing discussions with Paramount, WBD has reiterated that its agreement with Netflix remains active. The existing deal entails a $27.75 per share compensation for Warner’s studios and streaming operations.

WBD has a fiduciary responsibility to assess all proposals, but it had previously declined all offers from Paramount until this latest one. Transitioning to a new partnership would necessitate WBD determining that Paramount’s proposal is indeed superior. Should this determination occur, Netflix will have four business days to propose a matching offer. If Netflix opts not to engage, the merger with Paramount could proceed, resulting in the termination of the merger agreement with Netflix.