Paramount sweetens hostile bid to stop Netflix-Warner Bros. deal

By Andrew Kirell, CNN

(CNN) — Paramount on Tuesday moved again to sweeten its hostile bid for Warner Bros. Discovery, escalating its effort to derail the company’s pending acquisition by Netflix.

The David Ellison-led entertainment empire said it would pay Warner Bros. Discovery shareholders (WBD) approximately $650 million for each quarter the Netflix deal is not closed, beginning in 2027.

Paramount also said it would “fully and promptly” pay the $2.8 billion fee that Warner Bros. Discovery (WBD) would owe Netflix if their deal is terminated, according to a new SEC filing.

The filing comes as WBD moves toward closing its $83 billion deal to sell its studios and streaming assets to Netflix. Last month, Netflix revised its offer to all cash. (WBD’s remaining cable networks, including CNN, would spin off into a separate company called Discovery Global.)

Paramount notably did not increase its current $30-per-share, all-cash offer for the entire company, including CNN.

But the new “enhancements,” Ellison said in a statement, are meant to provide WBD shareholders with “certainty in value, a clear regulatory path, and protection against market volatility.”

WBD’s shares opened up about 1% on the news. However, to date, there is little evidence that shareholders are siding with Paramount in sufficient numbers. WBD has recently said that “more than 93%” of its shareholders are “rejecting Paramount’s inferior scheme.”

WBD’s shareholders are expected to hold a special meeting in late March or early April.

Netflix on the counter-offensive

Meanwhile, Netflix has been ramping up its PR battle against Paramount’s hostile bid.

During a Monday interview on the Fox Business Network, Netflix’s chief global affairs officer, Clete Willems, warned against Paramount’s proposal, saying the company “has identified $6 billion in synergies in the offer that they made, which is code for $6 billion in job cuts.”

Willems also addressed concerns about a Department of Justice probe into Netflix’s business practices, which was first reported by The Wall Street Journal.

Such reviews, Willems said, are part of the “totally ordinary course of business” when examining a merger.

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