Warner Bros Discovery (NASDAQ:WBD) shares advanced 1.8% to $27.71 following a revised proposal from Paramount Skydance (NASDAQ:PSKY) that improves the financial terms of its takeover bid.
The acquirer has introduced a ticking fee to the offer. Under the revised structure, Paramount Skydance will pay an additional $0.25 per Warner Bros Discovery share for every quarter the deal does not close after this year. According to the terms disclosed, that incremental payment translates to roughly $650 million in cash each quarter between the start of 2027 and the eventual closing of the transaction.
Paramount Skydance also agreed to pick up a potential breakup fee that Warner Bros Discovery might owe to Netflix (NASDAQ:NFLX) if Warner Bros Discovery were to terminate its current agreement with Netflix. By taking on that liability, Paramount Skydance is effectively removing a financial obstacle that could otherwise complicate the economics of a deal for Warner Bros Discovery shareholders.
The changes are aimed at enhancing the attractiveness of the offer to the HBO owner and its shareholders, with Paramount Skydance adjusting both the timing-related compensation through the ticking fee and the counterparty-risk exposure tied to the Netflix arrangement.
Context and implications
The ticking fee creates a structured payment that grows with delay - delivering cash to Warner Bros Discovery shareholders for each quarter the transaction remains open past this year. The quoted estimate of approximately $650 million per quarter sets the scale of the quarterly cash flow that would result should closing slip into 2027 and beyond.
Covering the Netflix breakup fee removes a discrete contingent cost that Warner Bros Discovery would otherwise bear if it walked away from its existing deal with Netflix. That concession is intended to reduce friction around shareholder evaluation of the revised offer.
What remains unclear from the announcement
- No additional changes to other financial terms of the offer were specified beyond the ticking fee and the assumption of the Netflix breakup fee.
- The timetable for closing, and whether the revised incentives will secure Warner Bros Discovery board or shareholder approval, was not disclosed.
The revised proposal arrived amid market attention to the potential deal dynamics and was followed by an uptick in Warner Bros Discovery's stock price.