Paramount Extends Warner Bros. Discovery Tender Offer Deadline to Feb. 20

Paramount Skydance has issued a second extension on its $30 per share tender offer for Warner Bros. Discovery.

The offer, which was set to expire on Wednesday at 5 p.m. ET, will now be extended to Feb. 20.The latest extension comes after the deadline was pushed from Jan. 8 to Jan. 21 in December.

The $108.4 billion bid is backed by Oracle co-founder Larry Ellison’s irrevocable personal guarantee towards $40.4 billion of the equity financing, and $55 billion in debt financing from Bank of America, Citigroup and Apollo Global Management. Its other equity partners include RedBird Capital Partners and three Middle Eastern sovereign wealth funds.

As of Wednesday, 168,511,695 shares have been validly tendered and not withdrawn, though shareholders can do so at any time before the deadline.

The move comes after Netflix revised its $83 billion deal for Warner’s studio and streaming assets to all-cash. The deal is valued at $27.75 per share, with WBD shareholders also expected to benefit from the spinoff of Discovery Global in the next six to nine months. Warner Bros. said in additional disclosures released on Tuesday that it believes the spinoff could be worth up to $6.86 per share.

Paramount, which has sued to obtain additional disclosure around how the $83 billion Netflix deal and Discovery Global were valued, has argued that the latter’s is worth between nothing and 50 cents. The company tried to expedite the proceedings of that lawsuit, but a judge dismissed its motion, ruling that it failed to demonstrate it would suffer irreparable harm. The ruling was based on the company’s standing and did not pertain to the merits of its claim.

In addition to the lawsuit, Ellison is threatening a proxy battle aimed at replacing WBD’s board of directors with its own slate of candidates to engage further with its offer. Paramount would also propose an amendment to Warner’s bylaws that would require shareholder approval of the Discovery Global spinoff.

Shareholders are expected to vote on the Netflix deal by April. However, a threshold of just 20% of WBD shareholders who have held the stock for at least a year would be needed to call a special meeting before then.

Both Paramount and Netflix are currently engaging with regulators, including the Department of Justice and European Commission. Netflix expects a deal to close within 12 to 18 months from when the deal was first announced, while Paramount has said a potential deal would close within a year.

If Warner Bros. abandons the deal with Netflix, it would be required to pay the streamer a $2.8 billion termination fee. If the deal is blocked by regulators, Netflix would pay WBD a $5.8 billion breakup fee.

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