Paramount’s first offer to buy Warner Bros. Discovery included a compensation package for WBD’s CEO David Zaslav that was worth “several hundred million dollars,” a SEC filing released on Wednesday revealed. At the time, Zaslav told the WBD board about the offer and informed the Ellison family “it would be inappropriate to discuss any such arrangements at that time.”
The exchanged happened in late September. That first offer to purchase all of Warner Bros. Discovery was a combination of $11.40 per stock in cash and 0.404 of a share of Paramount Skydance Class B common stock for each outstanding share of WBD Common Stock. On Sept. 30, Paramount made its second offer, bumping the amount up to $14.67 in cash and 0.376 of Paramount Skydance share. That bid also offered Zaslav the roles of co-Chief Executive Officer and co-Chairman of the board for the combined company.
The filing also revealed that Zaslav could make more than $567 million if WBD were to accept Paramount’s latest all-cash offer of $30 per share. As part of the offer’s golden parachute clause — the amount a company executive makes if said executive is dismissed due to a merger or takeover — Zaslav would make $30 million in cash, over $537 million in equity and $44,000 in perquisites and benefits.
As for the rest of WBD’s leadership, CFO Gunnar Wiedenfels could make over $144 million; Chief Revenue and Strategy Officer Bruce L. Campbell would make $138 million; CEO and President of Global Streaming and Games JB Perrette would make $167 million; and President of International Gerhard Zeiler would make $95 million. Once again, this would only happen if WBD accepted Paramount’s offer and Paramount Skydance fired these executives.
On Wednesday, WBD’s board issued a press release and a SEC filing advising the company’s shareholders to ignore Paramount’s all-cash acquisition offer. After three rounds of bidding from Comcast, Netflix and Paramount, Warner Bros. Discovery accepted Netflix’s offer on Dec. 5. Whereas all of Paramount’s bids have been to acquire all of Warner Bros. Discovery, Comcast and Netflix have only been interested in acquiring Warner Bros., the name of the upcoming spinoff company that will include WBD’s studio and streaming assets. The $72 billion deal would put the whole enterprise value at $82.7 billion and give WBD shareholders $27.75 per share.
Three days later, Paramount countered with an all-cash offer of $30 per share for $108.4 billion. As part of its hostile bid, Paramount appealed directly to WBD’s shareholders rather than going through the company’s board of directors.
But on Wednesday morning, WBD’s board advised shareholders to dismiss Paramount’s bid in no uncertain terms. In addition to calling the bid “inadequate” and “illusory,” the board revealed Paramount’s new offer did not address any of the concerns WBD previously raised, that the $40.7 billion of equity financing was not fully backed by the Ellison family and that Paramount has not agreed to pay for the $2.8 billion breakup fee it will incur if WBD backs out of the Netflix deal.
