Warner Bros Discovery is reportedly contemplating the possibility of reopening negotiations with Paramount Skydance regarding an acquisition, following an amended offer from the latter, as reported by Bloomberg News. The company’s board is evaluating whether Paramount's proposal could lead to a more favorable deal, although no definitive decision has been made, and the board may continue with its existing agreement with Netflix.
According to the report, Paramount has sweetened its bid by introducing a quarterly cash incentive for Warner Bros shareholders in the form of a "ticking fee." This fee amounts to 25 cents per share, potentially totaling around $650 million, which would commence in 2027 if the deal is not finalized by then. Additionally, Paramount has agreed to cover the $2.8 billion breakup fee that Warner Bros would incur if it terminates its deal with Netflix.
Despite enhancing its offer, Paramount has not increased its per-share valuation of $30, which still places the total deal value at approximately $108.4 billion, including debt. Both Paramount and Netflix are interested in acquiring Warner Bros for its prominent film and television production capabilities and its extensive content library, which features major franchises like "Game of Thrones" and "Harry Potter."
Activist investor Ancora Holdings has expressed its opposition to the Netflix agreement, citing concerns that the Warner Bros board has not engaged adequately with Paramount regarding its competing bid. Ancora has invested nearly $200 million in Warner Bros, indicating a significant stake in the ongoing negotiations.