Paramount Skydance has increased its all-cash hostile takeover bid for Warner Bros. Discovery (WBD) to $108.4 billion, but the offer is still not enough to win over WBD’s fifth-largest shareholder. WBD currently has an accepted $82.7 billion offer from Netflix for its studio (Warner Bros.) and streaming (HBO Max) assets. Paramount, however, is seeking to acquire the entire company, including major TV brands such as CNN and Turner.

The latest proposal from Paramount was strengthened by a $40.4 billion irrevocable personal guarantee from tech billionaire Larry Ellison, whose son, David Ellison, is Paramount’s CEO and leading the bid. Despite this, Alex Fitch, portfolio manager at Harris Associates—which holds a reported 4% stake in WBD—stated that the revised offer was “necessary, but not sufficient.” Fitch noted, “We see the two deals as a toss-up, and there is a cost to changing paths. If Paramount is serious about winning, they’re going to need to provide a greater incentive.”

Paramount’s offer remains at $30 per share, with Larry Ellison’s financial backing. The company has reportedly increased its severance fee (the amount paid to WBD if the deal falls through) and extended the offer deadline from January 8 to January 21. So far, only 400,000 of WBD’s 2.59 billion common stock shares have opted for the Paramount bid.

Financially, Netflix and Paramount present contrasting pictures. Netflix has a market capitalization of $402 billion and reported $8.5 billion in profit through September. In contrast, Paramount has a $14.5 billion market cap and posted a $48 million loss, and would take on $54 billion in debt to acquire WBD. The interest rates on this debt remain uncertain and could increase costs further.

Media analyst Michael Pachter of Wedbush Securities commented, “HBO throws off a lot of cash and the studio consolidation will likely eliminate a lot of overhead. It shouldn’t matter to WBD if Paramount can’t pay its debt. It’s like selling your house to someone who later defaults on the mortgage; it’s simply not your problem.”

Meanwhile, Mario Gabelli, CEO of GAMCO Investors and a WBD shareholder, recently encouraged Netflix to make its offer more attractive to shareholders. Netflix has reportedly secured a temporary $59 billion bridge loan as interim financing, and has restructured part of this loan to improve efficiency and reduce risk. This includes a $5 billion revolving credit line and two $10 billion delayed-draw term loans, allowing Netflix to access funds as needed and manage interest costs more effectively.

Disclaimer: This article has been auto-generated from a syndicated RSS feed and has not been edited by Vitrina staff. It is provided solely for informational purposes on a non-commercial basis.