Paramount Skydance Corp (PSKY.US) has increased its acquisition offer for Warner Bros. Discovery (WBD.US) in an effort to secure shareholder support and gain an advantage over competitor Netflix (NFLX.US). In a statement released Tuesday, Paramount Skydance announced that if Warner Bros. Discovery decides to terminate its existing agreement with Netflix, the company will cover the termination fee of up to $2.8 billion. Additionally, Paramount Skydance has committed to paying $1.5 billion in fees related to the refinancing of Warner Bros. Discovery's debt to make its proposal more attractive.
To demonstrate confidence in obtaining swift regulatory approval, Paramount Skydance has also proposed paying a "ticking fee" to Warner Bros. Discovery shareholders. If the deal is not completed by December 31 of this year, shareholders will receive an extra $0.25 per share for each subsequent quarter of delay.
Paramount Skydance has been actively pursuing the acquisition of Warner Bros. Discovery for several months. However, the market was surprised when Warner Bros. Discovery's board agreed to sell its studio and HBO Max streaming business to Netflix for $27.75 per share, totaling approximately $82.7 billion.
On the regulatory front, Paramount Skydance stated that it has submitted a second round of supplemental information to the U.S. Department of Justice as required. This development means regulators will respond within 10 days, marking a critical milestone in the antitrust review process. Analysts suggest that demonstrating an advantage in regulatory approval is a key part of Paramount Skydance's strategy to counter Netflix's acquisition plans. If Paramount Skydance successfully navigates this waiting period, it would be seen as preliminary government approval, potentially helping persuade Warner Bros. Discovery shareholders to vote against the Netflix deal and bolster support for its own offer.
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