Warner Bros. Discovery Shareholders Approve Paramount Acquisition Deal

In a preliminary vote on Thursday, Warner Bros. Discovery shareholders approved Paramount's deal to acquire the company in full after beating out Netflix, and CNBC is calling it "one step closer to the finish line." 

Paramount Would Acquire Numerous Major Media Assets 

The deal will include their acquisition of all of Warner Bros. Discovery's properties, such as TNT, CNN, Discovery Channel, the studio, and more. There are also plans, per David Ellison, to combine Paramount+ and another new property they'd acquire in this deal, HBO Max. 

Paramount Beat Out Netflix and Shareholders Approve 

Paramount came away victorious in the bidding war with its $31-per-share offer in late February. Netflix decided to walk away after enhancing its offer to $72 billion. 

As part of the deal, Paramount would also pay a $7 billion breakup fee if the deal doesn't pass regulatory review. They also agreed to pay them $2.8 billion, Warner Bros. Discovery owed Netflix for that deal falling apart. 

“Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros. Discovery, building on our successful equity and debt syndications and progress across regulatory approvals,” Paramount said in a statement Thursday. “We look forward to closing the transaction in the coming months and realizing the creation of a next-generation media and entertainment company that better serves both the creative community and consumers.”

Deal Expected to Close This Year, Shareholders Against Exec Payout

Both Paramount and Warner Bros. Discovery have said they expect the deal to close in the third quarter, assuming regulators approve it.

“Over the past four years, our teams have transformed Warner Bros. Discovery and returned the company to industry leadership,” WBD CEO David Zaslav said in a news release on Thursday. “Today’s stockholder approval is another key milestone toward completing this historic transaction that will deliver exceptional value to our stockholders. We will continue to work with Paramount to complete the remaining steps in this process that will create a leading, next-generation media and entertainment company.”

In the lead-up to the vote, we also learned that a "top proxy advisory firm," Institutional Shareholder Services, recommended that the shareholders OK the deal. 

“Further, shareholders are receiving a meaningful premium to the unaffected share price, there is a potential downside risk of non-approval, and the cash consideration provides liquidity and certainty of value to shareholders,” ISS wrote in its report. “Given these factors, support for the proposed transaction is warranted.”

It should also be noted that while the shareholders agreed to the Paramount deal, they were not in favor of payouts to Warner Bros. Discovery executives, such as David Zaslav, who stands to get upward of $800 million due to a "golden parachute" that provides benefits such as cash, stock, and bonuses to executives who lose their jobs during a merger or acquisition. 

However, CNBC said that "[s]ince it’s a non-binding vote, however, the payments to Zaslav and other executives will still go through."