Paramount’s Revised Bid for Warner Bros. Discovery Triggers Bidding War with Netflix

Warner Bros. Discovery’s (WBD) board has shifted its stance in the ongoing acquisition battle, signaling a preference for Paramount Skydance’s latest offer over a previous agreement with Netflix. On Tuesday, February 24, Paramount submitted an all-cash bid of $31 per share to acquire the entirety of WBD. The WBD board announced on Thursday, February 26, that it considers Paramount’s proposal “superior,” initiating a four-day window for Netflix to respond with a counteroffer.

The Bidding War Heats Up

Paramount’s revised offer includes not only the $31 per share cash payment but as well assumes responsibility for a $2.8 billion termination fee owed to Netflix should WBD back out of their existing deal. Paramount has agreed to a “ticking fee” of $0.25 per share per quarter, beginning after September 30, 2026, and a $7 billion regulatory termination fee if the merger fails to gain approval .

The original agreement between Netflix and WBD, announced on December 5, valued the Warner Bros. Studio and streaming businesses at $83 billion in a combination of stock and cash . However, Paramount’s interest lies in acquiring the entire WBD company, including networks like CNN and Discovery, setting the two bids apart in scope and complexity.

Netflix’s Response and Potential Outcomes

Netflix now has four days to either increase its offer or withdraw from the bidding process. WBD’s board, along with financial and legal advisors, will then evaluate both proposals to determine which offers the most favorable terms . The streaming giant’s stock has experienced a nearly 30% decline since deal discussions began last fall, raising questions about its willingness to continue pursuing the acquisition .

Financial Backing and Regulatory Concerns

Paramount’s bid is financially supported by Larry Ellison, the billionaire father of Paramount CEO David Ellison. The scale of the potential Warner deal is significant, representing nearly 100 times the size of any previous merger and acquisition (M&A) deal undertaken by Netflix in its nearly 30-year history .

The proposed mergers have also attracted scrutiny from regulatory bodies. Eleven state attorneys general have voiced opposition to the WBD-Netflix deal . Former President Trump has indicated he will not intervene in the matter .

Key Takeaways

• Paramount has submitted a “superior” all-cash bid of $31 per share for Warner Bros. Discovery.
• Netflix has four days to respond with a revised offer.
• The deal includes significant financial commitments from Paramount, including termination fees and ticking fees.
• Regulatory hurdles and opposition from state attorneys general remain potential obstacles.