Paramount revises hostile bid for Warner Bros Discovery as Netflix deal moves towards close

New Delhi: Paramount has revised its hostile takeover proposal for Warner Bros Discovery (WBD), adding financial incentives as it seeks to disrupt the company’s planned sale of its studios and streaming business to Netflix.

The move, disclosed in a regulatory filing, comes as WBD advances towards completing the $83 billion transaction with the streaming platform as per the news reports.

Under the revised proposal, Paramount said it would compensate WBD shareholders by around $650 million for each quarter that the Netflix transaction remains incomplete from 2027 onwards. The company also indicated that it would cover the $2.8 billion break fee payable to Netflix if WBD were to terminate its agreement with the streaming service.

The revised offer does not change Paramount’s existing $30-per-share all-cash bid for the entire company. Paramount said the additional terms are meant to provide Warner Bros. Discovery shareholders with greater certainty on value, a clearer regulatory path and protection against market volatility.

The developments come as WBD moves closer to finalising its agreement with Netflix, which recently revised its proposal to an all-cash offer. Under the planned transaction, WBD would sell its studios and streaming operations to Netflix, while its remaining cable networks would be separated into a standalone entity expected to be called Discovery Global.

WBD’s shares rose modestly in early trading following news of Paramount’s revised proposal. However, recent company statements indicate limited support for Paramount’s approach, with WBD reporting that more than 93% of its shareholders have rejected the rival bid. A special shareholder meeting to consider the Netflix deal is expected to take place in late March or early April.

The takeover contest has also played out in public statements from both sides. Netflix executives have criticised Paramount’s proposal, arguing that projected cost synergies associated with the bid could translate into substantial job reductions. They also described regulatory scrutiny of the planned merger as part of the standard review process for large transactions.

According to reports, Paramount’s revised proposal represents its latest effort to win over WBD investors as competition between the two suitors intensifies ahead of the shareholder vote and potential regulatory review.