Paramount’s $30 Warner Bros. Bid Adds $0.25 Quarterly Fee and Covers $2.8B Penalty
Paramount Skydance sweetened its $30 bid for Warner Bros. Discovery by adding a ticking fee boosting the price by $0.25 quarterly after Dec. 31, 2026, and covering the $2.8B Netflix termination fee. This adjustment creates an 8% premium over the $27.75 Netflix offer and shifts delay risk to Paramount.
1. Bidding War Overview
Warner Bros. Discovery faces two all-cash proposals: a Board-supported $27.75 per share deal from Netflix and a $30 per share hostile bid from Paramount Skydance, creating a high-stakes contest for shareholder approval.
2. Ticking Fee Mechanism
Paramount’s updated offer includes a ticking fee that increases the per-share price by $0.25 for each quarter the deal is delayed past Dec. 31, 2026, effectively insuring investors against lengthy regulatory reviews.
3. Netflix Termination Fee Coverage
To neutralize the $2.8 billion termination fee owed to Netflix if Warner Bros. Discovery abandons its agreement, Paramount has committed to paying that penalty itself, removing a key board objection.
4. Premium and Arbitrage Spread
Paramount’s $30 bid carries an 8% premium—$2.25 per share—over Netflix’s offer, yet Warner Bros. Discovery stock trades around $28, reflecting an arbitrage spread driven by regulatory uncertainty.