Paramount Sweetens offers to pay $2.8 billion Netflix termination fee, including Warner Bros. Discovery bid ticking fee

Paramount has revised its bid for Warner Bros. Discovery again, adding a ticking fee of 25 cents per share to what it calls an “outstanding” $30 per share, all-cash offer.

The fee, which equates to a cash value of approximately $650 million per quarter, will be paid to shareholders for each quarter that the transaction does not close after December 31, 2026.

The company also committed to reimburse Netflix for a $2.8 billion termination fee and a $5.8 billion breakup fee payable to WBD shareholders for $1.5 billion in financing costs related to the debt exchange without deduction.

Paramount also said it would extend the company’s existing $15 billion bridge loan and cover any incremental costs to do so or allow WBD.
“To structure permanent financing in any manner so long as the debt can be redeemed at a commercially reasonable cost.”

In addition, Paramount said it would provide flexibility between contract signing and closing by agreeing to any comparable Netflix interim operating covenants, and that it is open to discussing contract solutions to account for the possibility of continued financial performance beyond what WBD is currently projecting for its linear network business.

The amendment proposal includes $43.6 billion in equity commitments from the Ellison family and Redbird Capital Partners and $54 billion in debt commitments from Bank of America, Citigroup and Apollo.

Oracle co-founder Larry Ellison also provided $43.3 billion in equity financing as well as an irrevocable personal guarantee against any damages claims against Paramount.

“The additional benefits of our high $30 per share, all-cash offer clearly underscore our strong and unwavering commitment to providing WBD shareholders with the full value they deserve for their investment,” CEO David Ellison said in a statement.

The sweet offer, which marks Paramount’s ninth offer to date, said the media giant had complied with the Justice Department’s second request for information related to its tender offer by Monday as part of the regulator’s review.

The waiting period will end 10 calendar days after Paramount certifies “substantial compliance with such request” at 11:59 pm ET. Additionally, Paramount said it received clearance from foreign investment authorities in Germany on January 27.