WBD reviewing Paramount’s ‘ticking fee’ offer

Warner Bros. Discovery has said it is reviewing Paramount Skydance’s hostile takeover bid, following an enhanced offer from the David Ellison-led company.

Paramount yesterday said it would offer a $0.25c-per-share ‘ticking fee’ that would be paid to WBD shareholders at every quarter from 31 December, should its transaction not have closed.

Paramount said it underlined its “confidence in the speed and certainty of regulatory approval for its transaction”, with the fee amounting to around $650m each quarter.

Ellison’s bid already includes a $2.8bn termination fee payable to Netflix, which agreed a $27.75-per-share deal to buy the streaming and studio assets of WBD last year.

Paramount, which subsequently went hostile with its $30-per-share bid to acquire the entirety of WBD, has also told WBD it will remove a $1.5bn financing cost attached to its bid.

The Landman outfit has already said it will pay WBD $5.8bn if its takeover deal fails to materialise, a sum that Netflix has also agreed upon.

WBD confirmed receipt of “an amended, unsolicited tender offer” from Paramount, adding that it would “review and consider” the offer.

“The Board is not modifying its recommendation with respect to the Netflix merger agreement,” the company added. It has a meeting slated for an unspecified date in April to allow WBD shareholders to vote on their preferred takeover partner. 

The battle for the HBO owner has been raging for more than six months, following a series of rejected bids from Paramount.

WBD, which agreed its $83bn deal with Netflix in December, has subsequently urged its shareholders to reject Paramount’s more recent advances, which have included a $40bn (£29.9bn) personal guarantee to backstop the deal by Larry Ellison.

That move came after WBD said that the backstop provided by the Ellison family trust – which was included in Paramount’s 4 December proposal to WBD and the 8 December tender offer to WBD shareholders – was inadequate, and that the only fix would be a personal guarantee from Paramount chief executive David Ellison’s billionaire father, Larry.

That, however, did not persuade the WBD board to change its decision to favour Netflix. The HBO owner previously confirmed that it has “unanimously determined” that Paramount Skydance’s amended offer ”is not in the best interests” of the company or its shareholders.