Paramount Skydance Redefines Offer With $31/Share Proposal to Compete for WBD

Paramount Global’s Skydance subsidiary has submitted a revised acquisition proposal for Warner Bros. Discovery that fundamentally reshapes the competitive landscape for the media conglomerate. The new bid, announced in late February 2026, positions itself as a substantive alternative to WBD’s existing merger framework with Netflix, marking a critical juncture in one of entertainment’s most complex multi-party negotiations.

The Revised Offer Structure and Superior Proposal Framework

At the heart of Paramount’s redefined proposal sits a $31 per share cash offer, bolstered by a quarterly ticking fee of $0.25 that accrues beginning after September 30. The structure itself reveals Paramount’s determination to sweeten its competitive position. Crucially, the proposal includes a $7 billion regulatory termination fee—protection against deal failure due to antitrust or other government obstacles. This figure stands alongside the $2.8 billion breakup fee that WBD would owe Netflix to dissolve its existing merger agreement, effectively carving out a financial pathway should Paramount’s offer gain board approval.

WBD’s board has determined that this revised proposal meets the threshold of a “Superior Proposal” under merger agreement terminology—meaning it could reasonably be expected to generate superior value. However, the board has stopped short of declaring it genuinely superior, instead continuing active discussions with Paramount Skydance while maintaining Netflix remains the recommended transaction.

Paramount’s Amended Deal Definition: Additional Financial Commitments

The refined offer introduces additional structural safeguards demanded by Paramount’s lending partners. Most notably, Paramount commits to providing extra equity funding if required to satisfy solvency certificates mandated by its banking syndicate. This enhancement reflects lender concern about the financial engineering required to execute the transaction.

Additionally, the revised proposal redefines “Company Material Adverse Effect”—a standard merger agreement provision—to exclude the performance of WBD’s Global Linear Networks business. This carve-out effectively shields Paramount from walkaway rights if that division underperforms, narrowing the traditional exit mechanisms available to the acquirer.

Market Reaction and Negotiation Rights

Under Netflix’s existing merger agreement, the streaming platform retains matching rights: Netflix receives four business days to review Paramount’s proposal and counter with revised terms. Netflix’s merger agreement remains active, with WBD’s board continuing to recommend the Netflix transaction despite Paramount’s competitive move.

Trading activity reflected the elevated stakes. WBD closed at $29.15 on February 25, while Paramount Skydance ended at $10.39 and Netflix closed at $78.04. The overnight session saw modest gains across all three equities, suggesting market participants view the competing proposals as roughly balanced rather than clearly favoring one outcome.