Paramount Still Trying to Woo Warner Bros. Shareholders

 While they haven’t formally upped their current all-cash bid for Warner Bros., Paramount has sweetened the deal a little with a ticking fee. To fill us in on this latest development, we have Blake & Wang P.A. check entertainment lawyer Los Angeles USA, Brandon Blake. 

                                                                  Brandon Blake

Ticking Fee Offer

 

While the underlying $30 all-cash bid per share will stay in place, they have added a new $0.25 per share ticking fee payable to the shareholders for every quarter the deal Paramount wants with Warner Bros. Discovery has not closed, with the timeline starting on the last day of this year.

 

This should come out to around $650M in value per quarter and, at a deeper level, is also something of a flex from Paramount that it believes it can close regulatory matters faster than Netflix, the accepted buyer. It also put up a $2.8B termination fee to get Warner Bros. out of its existing deal with Netflix.

 

What Now?

 

Warner Bros. has now repeatedly advised its shareholders to ignore the hostile takeover attempt underway from Paramount, with quite a PR battle raging around the matter as everyone tries to bring them over to their side and approach. Netflix has also pushed its offer up to $27.75 all cash, where the prior offer was for cash and stock.

 

There will be a special meeting in April to (hopefully) close the deal, with a vote for the Netflix transaction. Should it close as planned, the spin-off of linear TV channels from Warner Bros. Discovery into Discovery Global would still need to take place before the merger can occur.

Until we see what comes from that meeting, the plan is still to close the Netflix deal, but at this point, it’s looking ever more unclear how it will all turn out.

 

 

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