Warner Bros. Discovery stock rises after Paramount sweetens takeover offer

Investing.com -- Warner Bros. Discovery Inc. (NASDAQ: WBD) stock rose 2% Tuesday after Paramount Skydance Corporation (NASDAQ: PSKY) enhanced its $30 per share all-cash takeover offer with additional financial incentives.

The improved bid now includes a $0.25 per share quarterly "ticking fee" that would begin accruing January 1, 2027, if the transaction hasn’t closed by December 31, 2026. This would add approximately $650 million in cash value each quarter, demonstrating Paramount’s confidence in securing regulatory approval quickly.

In a significant move, Paramount has also agreed to cover Warner Bros. Discovery’s $2.8 billion termination fee to Netflix Inc. (NASDAQ: NFLX), addressing a major financial obstacle to the deal. The WBD board had previously rejected Paramount’s offer in December 2025, stating it wasn’t in shareholders’ best interests and didn’t qualify as a "Superior Proposal" under WBD’s existing merger agreement with Netflix.

Paramount will additionally eliminate WBD’s potential $1.5 billion debt financing cost by backstopping a bond exchange offer, with a commitment to reimburse shareholders if the exchange fails and the transaction doesn’t close.

The enhanced offer is backed by $43.6 billion in equity commitments from the Ellison Family and RedBird Capital Partners, plus $54.0 billion in debt commitments from Bank of America, Citigroup and Apollo. Larry Ellison has provided a personal guarantee of $43.3 billion.

Paramount has extended its tender offer expiration to March 2, 2026. As of February 9, 42.3 million WBD shares had been tendered. Warner Bros. Discovery has not yet responded to the improved offer.

You May Also Be Interested In

• Citadel unwinds 80% of Aschenbrenner’s portfolio risk - report
• Premarket movers: Crypto stocks rally, Ross Stores jump on upbeat forecast
• MPS prepares twin bids for Banco BPM and Banca Generali in Intesa defense - FT