Warner Bros. Discovery may have to reconsider Paramount Skydance's offer

Paramount Skydance revised its $78 billion proposal to cover Netflix's $2.8 billion breakup fee and add a 25-cent-per-share quarterly ticking fee; Warner Bros. Discovery said it will carefully review the offer under its agreement with Netflix.

Warner Bros. Discovery is evaluating a revised takeover proposal from Paramount Skydance that aims to replace the pending Netflix transaction. The new terms mainly cover Netflix's $2.8 billion breakup fee and add a 25-cent-per-share quarterly "ticking fee" if regulators delay approval. The revised bid does not meet several demands WBD has made, and the consideration is unfolding as antitrust scrutiny of Netflix intensifies. Key developments: - Paramount Skydance presented a $78 billion offer that includes paying Netflix's $2.8 billion breakup fee and a 25-cent-per-share quarterly ticking fee after Dec. 31 while the deal remains unresolved. - The revised proposal does not include the $3-per-share increase WBD CEO David Zaslav sought, nor a reported personal debt guarantee from Larry Ellison. - Warner Bros. Discovery said it will "carefully review and consider" the Paramount Skydance offer in accordance with its agreement with Netflix. - Regulators and lawmakers have increased scrutiny of Netflix, including reported questions under Section 2 of the Sherman Antitrust Act and attention from the Department of Justice and the Senate Judiciary Committee. - Sources report that WBD had planned a shareholder vote soon and that executives are weighing scenarios if Netflix walks away, which could leave WBD slimmer, with a cable spinoff, reduced debt on the main company, a $5.8 billion breakup fee, and a likely lower stock price. Summary: The revised Paramount Skydance offer changes the financial dynamics by addressing Netflix's breakup fee and adding a ticking fee while leaving key WBD demands unmet. Warner Bros. Discovery said it will review the proposal and is expected to respond soon; the final outcome will depend in part on ongoing regulatory and legal developments. Undetermined at this time.