Paramount Skydance Corp. (PSKY) sweetened its takeover offer for Warner Bros. Discovery Inc. (WBD) with a “ticking fee” of up to $650M payable each quarter after 2026 if the regulatory approval for the $108B deal is delayed.
Among other things, the David Ellison-led media company said Tuesday it will fund a $2.8B termination fee to Netflix (NFLX) and will fully backstop a debt exchange offer that would relieve Warner Bros. of its contractual bondholder obligations and potentially eliminate $1.5B in financing costs associated with that.
Paramount said that its debt financing sources are “fully prepared” to extend the maturity of Warner’s existing $15B bridge loan in case WBD fails to get it extended with its banks. Paramount will also permit the CNN owner to structure permanent financing in any way it chooses so long as the debt is redeemable at “a commercially reasonable cost.”
Moreover, Paramount said it would address any concerns the David Zaslav-led company has regarding the impact of Discovery Global’s performance on closing certainty and is open to discussing contractual solutions with WBD’s board. It will also match any comparable interim operating covenants to which Netflix and Warner Bros. already agreed.
The HBO parent is currently going with Netflix’s $72B offer, excluding debt, for its coveted streaming and studio operations.