Paramount Submits Revised Tender Offer to Warner Bros... "Netflix Penalty Payment"

Media and content company Paramount SkyDance (hereafter referred to as Paramount) has launched a full-scale effort to block the merger between Warner Bros Discovery (hereafter referred to as Warner Bros) and Netflix.

⬦ "$30 cash per share + delayed compensation + penalty for contract termination"... A bold revised proposal

On the 10th (local time), Paramount submitted a revised tender offer to the U.S. Securities and Exchange Commission (SEC), presenting unprecedented conditions to Warner Bros shareholders.

According to the revision, Paramount will pay Warner Bros shareholders a delayed fee of $0.25 per share, totaling $650 million (approximately 946.5 billion won), starting in 2027 if the merger between Warner Bros and Netflix is delayed. This is an extraordinary proposal in the form of compensation for the delay in the merger and acquisition.

Additionally, it includes a promise that Paramount will advance the $2.8 billion penalty that Warner Bros would have to bear if the contract with Netflix is terminated.

This is an enhanced version of the existing proposal to acquire Warner Bros shares at $30 per share in full cash.

David Ellison, Chairman of Paramount, emphasized in a statement on the company's website that "we have always been confident that our proposal is superior to Netflix's offer," adding that "this revision offers conditions that are definitely more favorable to Warner Bros shareholders than the deal with Netflix."

⬦ Activist investors join in... Pressure on Warner CEO

Meanwhile, the movements of activist investors are also intensifying. The Wall Street Journal reported that activist investor Ancora Holdings has secured approximately $200 million worth of Warner Bros shares and plans to block the merger with Netflix.

Ancora Holdings is said to have conveyed to David Zaslav, CEO of Warner Bros, that if the board does not negotiate under the best conditions, they will not hesitate to engage in a 'proxy battle'.

The Warner Bros board selected Netflix as the transaction partner after a competitive bidding process last December and agreed to sell its streaming and studio division for $72 billion (at $27.75 per share). This is considered a mega deal that will reshape the global media industry.

After being eliminated from the acquisition race, Paramount filed a lawsuit demanding the disclosure of merger contract information, but it was dismissed. Subsequently, they declared a hostile takeover of Warner Bros and are currently conducting a tender offer for shares until the 20th of this month.