Paramount woos Warner Bros investors with regulatory delay payout
Paramount has upped the ante in its bid for Warner Bros Discovery, adding a so-called ticking fee to its $108bn (£78bn) takeover offer.
The move comes as the streaming giant seeks to reassure shareholders amid heightened antitrust scrutiny.
Under the revised terms, Paramount Skydance will pay Warner Bros. Discovery investors an additional $0.25 per share for each quarter the deal fails to close after 31 December 2026.
The extra payment is set to compensate shareholders if regulatory approvals delay completion, effectively shifting part of the regulatory risk onto Paramount.
The sweetener sits alongside Paramount’s existing $30-a-share all-cash offer and is equivalent to roughly $650m in additional consideration per quarter.
Paramount said the move underlines its confidence in securing antitrust clearance and improves deal certainty for WBD shareholders.
Shares in Warner Bros Discovery rose nearly three per cent in pre-market trading, while Paramount Skydance shares were up around one per cent.
Merger under scrutiny
The revised proposal comes as Paramount, led by billionaire David Ellison, presses to complete a US Justice Department antitrust review of its offer in the coming weeks.
Paramount has been supplying information requested by regulators, which would trigger a 10-day waiting period for the Department of Justice (DoJ) to decide whether to challenge the bid.
Clearing that initial review is seen as central to Paramount’s attempt to derail Netflix’s agreed $82.7bn deal to acquire Warner Bros’ studios and streaming assets, which WBD struck in December and is due to put to a shareholder vote by April.
While the expiry of the waiting period would not prevent further scrutiny, Paramount hopes that progress with regulators will strengthen its case with shareholders as they weigh the competing offers.
The Justice Department is conducting in-depth reviews of both the Netflix and Paramount proposals and has reportedly approached Hollywood stakeholders, including talent agencies, as part of its inquiries.