Warner Bros. Weighs Reopening Sale Negotiations With Paramount
Summary
Warner Bros Discovery Inc. is reportedly contemplating renewed sale discussions with Paramount Skydance Corp. following an updated offer from the rival studio, according to sources familiar with the situation. This potential move could reshape Hollywood's competitive landscape.
Key Insights
What is a 'ticking fee' and why did Paramount include it in its offer?
A ticking fee is a quarterly payment made to shareholders while a deal remains pending. Paramount offered 25 cents per share each quarter (approximately $650 million per quarter) to compensate Warner Bros. Discovery shareholders for the time and uncertainty involved in ongoing negotiations. This sweetens the deal by providing immediate cash value to shareholders even before the acquisition closes.
Sources:
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How does Paramount's offer differ from Netflix's competing bid for Warner Bros. Discovery?
Paramount is bidding $108.4 billion in enterprise value to acquire all of Warner Bros. Discovery as a complete company, while Netflix's offer of $82.7 billion is only for WBD's studio and streaming assets. Netflix's deal would allow WBD's cable networks to be separated into an independent public entity, whereas Paramount's acquisition would keep the entire company intact. Paramount's offer is all-cash, while Netflix's proposal was amended to all-cash as well.