Paramount Skydance Corp. Raises Offer for Warner Bros. Discovery Inc.

Key Developments:

• Paramount Skydance Corp. has submitted a new $31-a-share buyout offer for Warner Bros. Discovery Inc., increasing its bid by $1 from the previous $30-a-share offer.
• The revised proposal includes a 25-cent per share "ticking fee" for each quarter after September 30 that the deal hasn't received regulatory approval, as well as a $7 billion payment to Warner Bros. if regulators block the sale.
• Paramount has also agreed to contribute more equity if any of its lenders used doubts about its solvency to avoid funding the deal.

Deal Status:

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• Warner Bros. Discovery Inc. has not withdrawn its recommendation that investors support Netflix Inc.'s $27.75-a-share agreement to acquire the company's studio and HBO operations.
• The company's board plans to engage in further talks with Paramount and will give Netflix four business days to respond if the board backs the sweetened offer.
• Negotiations between Paramount and Warner Bros. were still ongoing as of midnight, with the two companies set to resume discussions after the seven-day negotiation window expired.

Market Reaction:

• Shares of Warner Bros. Discovery Inc. were down less than 1% in extended trading after the announcement, while Paramount Skydance Corp. and Netflix Inc. both rose more than 1%.
• The deal is seen as a test of Netflix's appetite to pay up for Warner Bros.' production studios and a library that includes the DC Comics franchise and Game of Thrones.

Background:

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• Paramount Skydance Corp. has been seeking to acquire Warner Bros. Discovery Inc. since September, raising its offer price multiple times and making changes to the terms requested by the Warner Bros. board.
• The deal is part of a broader trend in the entertainment industry, with studios like Paramount and Warner facing pressure to combine and adapt to declining revenue from traditional media services.