Paramount Escalates Warner Takeover Bid With Multi-Billion-Dollar Sweeteners

MEDIA & ENTERTAINMENT  |  M&A DEAL TRACKER

Paramount Escalates Warner Takeover Bid With

Multi-Billion-Dollar Sweeteners

Enhanced hostile offer covers Netflix's $2.8B termination fee, introduces quarterly

'ticking fee,' and backs deal with Larry Ellison's $43.3B personal guarantee

The Enhanced Offer: Putting Money Where Its Mouth Is

Paramount Global filed an amended hostile tender offer for Warner Bros. Discovery (WBD) with the SEC on February 10, leaving the headline price at $30 per share in cash but wrapping the bid in a comprehensive package of financial concessions designed to neutralize every argument Warner's board has used to reject it.

The centerpiece: Paramount will pay WBD's $2.8 billion termination fee to Netflix the moment Warner walks away from that deal. "We are putting additional money where our mouth is," said Gerry Cardinale, head of RedBird Capital Partners, which is co-sponsoring the bid alongside the Ellison family.

Paramount also introduced a 'ticking fee' mechanism: if the transaction has not closed by December 31, 2026, Warner shareholders will receive an additional $0.25 per share for each quarter of delay beginning January 2027—roughly $650 million per quarter. The provision serves a dual purpose, compensating shareholders for regulatory lag while broadcasting Paramount's conviction that antitrust clearance can be obtained quickly. Germany has already approved the deal, and Paramount confirmed compliance with a U.S. Department of Justice information request.

Further sweeteners target WBD's balance-sheet concerns. Warner had argued that a Paramount deal would prevent it from executing a planned debt exchange, triggering approximately $1.5 billion in additional financing costs. Paramount's amended filing commits to fully backstopping that exchange offer, reimbursing shareholders for the fee without reducing the separate $5.8 billion reverse termination fee that Netflix (and Paramount) would owe Warner if an acquisition fails to close. Should Warner's existing lenders refuse to extend the maturity of its $15 billion bridge loan, Paramount's own financing sources—Bank of America, Citigroup, and Apollo—stand ready to step in, with any incremental costs absorbed by Paramount.

Financing Architecture: The $43.3B Personal Guarantee

Perhaps the most striking element of the revised offer is its financing certainty. Paramount disclosed a fully committed capital structure comprising $43.6 billion in equity from the Ellison Family and RedBird Capital, alongside $54 billion in debt from Bank of America, Citigroup, and Apollo—totaling approximately $97.6 billion in committed financing for a deal valued at $77.9 billion.

Underpinning the equity tranche is an irrevocable personal guarantee of $43.3 billion from Oracle co-founder Larry Ellison, covering both the equity financing commitment and any damages claims against Paramount. The guarantee effectively pledges a substantial portion of the world's fourth-richest individual's net worth as collateral—a direct response to Warner's repeated assertions that Paramount's financing lacks the certainty of Netflix's balance sheet.

Netflix Deal vs. Paramount Deal: Side-by-Side Comparison

The Boardroom Battle: Proxy War Takes Shape

Warner's board confirmed receipt of the amended offer and said it would "carefully review and consider" the terms before issuing a formal recommendation. In the meantime, the board reiterated its support for the Netflix transaction and advised shareholders "not to take any action" on Paramount's unsolicited bid.

The battlefield is multi-front and intensifying. Warner has yet to set a date for the special shareholder meeting in April at which the Netflix deal will be put to a vote. Paramount is simultaneously lobbying those same shareholders to vote 'no' on the Netflix transaction and tender their WBD shares to Paramount. The Ellison family has signaled it will nominate an alternate slate of directors at WBD's annual general meeting to force a board-level regime change.

In a public letter filed with the SEC, Paramount-Skydance CEO David Ellison struck a conciliatory tone, writing: "While we have tried to be as constructive as possible in formulating these solutions, several of these items would benefit from collaborative discussion to finalize. If granted a short window of engagement, we will work with you to refine these solutions to ensure they address any and all of your concerns."

RedBird's Cardinale, meanwhile, signaled that more concessions could be forthcoming. When asked whether this was Paramount's "best and final" offer, he responded: "It's hard to say 'best and final' when they aren't engaging with you. Right now I'm having a soliloquy."

All three companies—Netflix, Warner, and Paramount—are engaged in a full-scale PR campaign, courting content creators, labor unions, politicians, and regulators on both sides of the Atlantic. Netflix recently upgraded its own offer from a cash-and-stock structure to all-cash at $27.75 per share, a move designed to match the simplicity and certainty of Paramount's bid. Today's filing is Paramount's counterpunch.

Strategic Implications: Two Visions for Hollywood's Future

The two competing bids embody fundamentally different visions for the future of the media industry.

The Netflix-Warner deal represents a streaming-first vertical integration play. Netflix would absorb HBO Max and Warner's storied studios while shedding the cable networks into a separate public company called 'Discovery Global.' The result: an even more dominant global streaming platform with unparalleled content libraries, but one that concentrates enormous buyer power in the hands of a single distributor.

The Paramount-Warner deal represents a full-spectrum horizontal consolidation. Acquiring all of WBD—including CNN, TNT, Food Network, and the entire linear television portfolio alongside streaming and studio assets—would create a media conglomerate spanning every distribution window from theatrical to FAST to premium cable. It is a bet that the future of media is not streaming-only but omnichannel.

The regulatory calculus differs accordingly. The Netflix-Warner combination raises concentration concerns in global streaming markets, where Netflix already commands the largest subscriber base. The Paramount-Warner deal, while enormous in absolute terms, is primarily a legacy-media horizontal merger—a category with more established precedent, as evidenced by Germany's early clearance. Paramount's willingness to introduce the ticking fee suggests its antitrust counsel sees a manageable path, though both deals face extended review timelines in the U.S. and EU.

Notably, Paramount committed to matching any interim operating covenants Netflix has agreed to during the period between signing and closing, and declared itself "open to discussing contractual solutions to account for the possibility of continuing deteriorating financial performance" in WBD's linear television business. This language acknowledges the structural decline of cable while positioning Paramount as a flexible partner willing to manage downside risk.

Implications for Korean Content & Global Licensing

The outcome of this megadeal will have tangible consequences for the global distribution architecture of Korean content (K-content).

Under the Netflix scenario, the world's largest streamer would add HBO Max's global subscriber base and Warner's deep content library to its existing dominance. For Korean studios and production companies, this would mean an even more concentrated buyer landscape: Netflix's negotiating leverage over K-content licensing fees and co-production terms would increase materially, while alternative distribution outlets would contract.

Under the Paramount scenario, the combined entity would control both Paramount+ and Max, creating a new global mega-platform that would need premium content to compete with Netflix. This could open a new high-value licensing and co-production channel for K-content, diversifying the buyer pool and potentially improving terms for Korean rights holders.

Additionally, the potential spin-off of 'Discovery Global' under the Netflix deal—a standalone company housing linear television channels and select non-streaming assets—could emerge as a new variable in the FAST (Free Ad-Supported Streaming TV) channel strategy for Korean broadcasters and cable networks seeking international distribution. The FAST market, projected to grow from $5.8 billion in 2025 to $10.6 billion by 2030, represents an increasingly important secondary window for K-content monetization.

Regardless of which deal prevails, the balance of power between Hollywood studios and global platforms is shifting decisively. Korean content companies would be well-served to develop contingency strategies for both outcomes, particularly around licensing terms, platform diversification, and the emerging FAST ecosystem.

Sources:

The Wall Street Journal, 'Paramount Sweetens Warner Offer' (Joe Flint & Jessica Toonkel, Feb. 10, 2026);

Deadline, 'Paramount Sweetens Offer For Warner Bros. Discovery' (Jill Goldsmith, Feb. 10, 2026); SEC filings.

Disclaimer: This report is based on publicly available news reports and regulatory filings. It does not constitute investment advice.