Paramount(PSKY.US) increases acquisition of Warner Bros.(WBD.US) offer, promises to cover termination fees to counter Netflix(NFLX.US)

Paramount Global (PSKY.US) is further increasing its bid to acquire Warner Bros. Discovery (WBD.US) in an effort to gain an advantage over Netflix (NFLX.US) in the competition.

On Tuesday, Paramount announced that if Warner Bros. Discovery decides to terminate the previously agreed deal with Netflix, the company will pay up to $2.8 billion in breakup fees. Additionally, Paramount has committed to covering $1.5 billion in debt refinancing costs related to Warner Bros. Discovery, further enhancing its offer’s attractiveness.

To demonstrate confidence in obtaining swift regulatory approval, Paramount also proposed paying a so-called “timing fee” to Warner Bros. Discovery shareholders. If the deal is not completed by December 31 of this year, an additional $0.25 per share will be paid for each quarter of delay thereafter.

Over the past few months, Paramount has been actively pushing forward with its acquisition of Warner Bros. Discovery. However, the market was previously surprised when Warner Bros. Discovery’s board agreed to sell its film studio and HBO Max streaming business to Netflix at $27.75 per share, totaling approximately $82.7 billion.

On the regulatory front, Paramount stated that it has submitted a second round of supplemental information to the U.S. Department of Justice as required. This development means that regulators will respond within 10 days, marking a key milestone in the antitrust review process.

Analysts believe that demonstrating an advantage in regulatory approval is one of Paramount’s core strategies to counter Netflix’s acquisition plan. If Paramount successfully passes this waiting period, it will be seen as gaining preliminary government approval, which could help persuade Warner Bros. Discovery shareholders to vote against the Netflix deal, thereby increasing support for Paramount’s bid.