Paramount Sweetens Warner Bros. Discovery Takeover Bid
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 9h ago
0mins
Should l Buy PSKY?
Source: seekingalpha
- Enhanced Offer: Paramount Skydance has sweetened its takeover bid for Warner Bros. Discovery by introducing a ticking fee of up to $650 million payable quarterly if regulatory approval for the $108 billion deal is delayed, thereby increasing the attractiveness of the offer and potentially expediting negotiations.
- Termination Fee Support: Paramount's commitment to fund a $2.8 billion termination fee to Netflix not only alleviates Warner's financial burden but also has the potential to eliminate $1.5 billion in financing costs, thereby improving its financial standing and competitive position in the industry.
- Debt Financing Assurance: Paramount has stated that its debt financing sources are fully prepared to extend the maturity of Warner's existing $15 billion bridge loan, providing necessary financial flexibility for Warner to navigate potential financing challenges.
- Covenant Matching: Paramount is open to discussing contractual solutions with Warner's board and will match any comparable interim operating covenants agreed upon with Netflix, thereby enhancing Warner's confidence and negotiating power during the acquisition process.
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Analyst Views on PSKY
Wall Street analysts forecast PSKY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PSKY is 14.08 USD with a low forecast of 8.00 USD and a high forecast of 19.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
1 Buy
7 Hold
7 Sell
Moderate Sell
Current: 10.680
Low
8.00
Averages
14.08
High
19.00
Current: 10.680
Low
8.00
Averages
14.08
High
19.00
About PSKY
Paramount Skydance Corp, formerly New Pluto Global, Inc., is a holding company. It operates through its wholly owned subsidiaries, Paramount Global (Paramount) and Skydance Media, LLC (Skydance). Paramount is a global media, streaming and entertainment company that creates premium content and experiences for audiences worldwide. Its consumer brands include CBS, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+ and Pluto TV. In addition to offering streaming services and digital video products, it also provides production, distribution and advertising solutions. Skydance is a diversified media company focused on creating event-level entertainment for global audiences. Skydance develops, finances and produces live-action and animated films, television shows, sports content and interactive games worldwide. Skydance has also produced 31 seasons of live-action and animated television content across 16 series and supplies content across a range of platforms.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- New Product Lines Development: Mattel will develop new product lines for the animated movie sequel Teenage Mutant Ninja Turtles: Mutant Mayhem 2 set for 2027 and a new live-action/CG animation hybrid in 2028, further expanding brand influence and attracting a new generation of fans.
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- Strategic Partnership Deepening: This agreement builds on the existing relationship between Mattel and Paramount, as both companies aim to drive global brand development through innovative products and immersive experiences, further solidifying their market position.
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- Acquisition Offer Confirmation: Warner Bros. Discovery (WBD) confirmed receipt of an amended unsolicited tender offer from Paramount Skydance Corporation (PSKY) to acquire all outstanding shares of WBD common stock, indicating strong market interest in its equity.
- Increased Cash Bid: Paramount Skydance enhanced its all-cash bid to $30 per share, demonstrating a more robust commitment to acquiring WBD, which may prompt shareholders to reassess the company's future value.
- Board Review Process: WBD stated it will review the amended tender offer and advise shareholders of the Board's recommendation post-review, reflecting the company's cautious approach in acquisition negotiations.
- Netflix Merger Agreement Unchanged: Despite the changes in the acquisition offer, WBD's Board indicated it would not modify its recommendation regarding the Netflix Merger Agreement, showcasing consistency and stability in the company's strategic direction.
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- Enhanced Acquisition Proposal: Paramount has amended its all-cash tender offer for Warner Bros. Discovery, maintaining a $30 per share bid while adding new incentives and financing commitments to strengthen its proposal's attractiveness.
- Superior to Competitors: Paramount's offer is viewed as providing greater value and certainty compared to Netflix's sliding-scale merger consideration, which ranges from $21.23 to $27.75 per share depending on Warner's debt levels.
- Financial Commitments: To improve the proposal, Paramount introduced a $0.25 per share quarterly 'ticking fee' and agreed to cover the $2.8 billion termination fee if Warner exits its current agreement with Netflix.
- Financing Assurance: Paramount's acquisition proposal is fully financed, backed by $43.6 billion in equity commitments and $54 billion in debt commitments, with a personal guarantee of $43.3 billion from Larry Ellison, demonstrating its strong financial position.
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- Acquisition Offer Confirmation: Warner Bros. Discovery has acknowledged an amended acquisition offer from Paramount Skydance to acquire all outstanding shares, indicating market interest and potential value in its equity.
- Board Review: The Warner Bros. Board will carefully review the offer with independent financial and legal advisors, ensuring compliance with its obligations under the Netflix merger agreement, reflecting a cautious approach to strategic decisions.
- Shareholder Advisory: The company advises shareholders not to take any action until the review is complete, demonstrating a commitment to shareholder interests while potentially impacting confidence in future transactions.
- Legal Counsel Engagement: Warner Bros. has engaged Allen & Company, J.P. Morgan, and Evercore as financial advisors, along with Wachtell Lipton and Debevoise & Plimpton LLP as legal counsel, showcasing professional support and compliance in navigating complex transactions.
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- Acquisition Offer Confirmation: Warner Bros. Discovery has acknowledged an unsolicited amended tender offer from Paramount Skydance to acquire all outstanding shares, indicating significant market interest and potential value in its equity.
- Board Review: The Warner Bros. Board will carefully evaluate the acquisition offer in accordance with the terms of its agreement with Netflix, demonstrating a cautious approach to strategic decision-making and fiduciary responsibilities.
- Shareholder Advisory: The company advises shareholders not to take any action until the review is complete, aiming to protect shareholder interests and prevent unnecessary market volatility, reflecting a commitment to shareholder value.
- Advisory Team Support: Warner Bros. has engaged Allen & Company, J.P. Morgan, and Evercore as financial advisors to ensure professional support during complex acquisition negotiations, enhancing its negotiating power in the market.
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- Enhanced Hostile Bid: Paramount has added a 'ticking fee' of 25 cents per share per quarter to its hostile bid for Warner Bros. Discovery, signaling regulatory confidence and potentially providing about $650 million in cash value to shareholders for each quarter the deal remains unclosed, thereby increasing the bid's attractiveness.
- Cash Offer Commitment: Paramount is offering $30 per share in cash for Warner Bros. Discovery, and although it did not raise the offer, CEO David Ellison emphasized that this proposal provides shareholders with certainty in value and a clear regulatory path, aiming to surpass Netflix's competing transaction.
- Termination Fee Assurance: Paramount has committed to fund the $2.8 billion termination fee that Warner Bros. Discovery would owe to Netflix if the deal fails, along with eliminating a potential $1.5 billion refinancing cost, further enhancing the appeal of its acquisition proposal.
- Financial Backing: The revised acquisition proposal is fully financed by $43.6 billion in equity commitments and $54 billion in debt commitments, showcasing Paramount's strong financial backing in pursuing the acquisition of Warner Bros. Discovery, addressing antitrust concerns, and ensuring a smooth transaction process.
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