Warner Bros. Discovery Reconsiders Paramount Offer Amid Netflix Deal

Warner Bros. Discovery (WBD) is weighing a potential reopening of sale negotiations with Paramount Skydance, following an amended bid that includes significant concessions, according to reports from CNBC and Fortune. This development comes despite WBD having a signed agreement to sell its film studio and HBO Max streaming service to Netflix.

Paramount’s Sweetened Bid

Paramount’s latest offer includes a cash payment of $30 per share for WBD, exceeding Netflix’s initial bid of $27.75 per share. Crucially, Paramount has also offered to cover a $2.8 billion termination fee payable to Netflix if the WBD deal is terminated as reported by Bloomberg. Paramount is offering a “ticking fee” of $0.25 per share for each quarter the deal remains unclosed past December 31, 2026, potentially adding approximately $650 million in cash value per quarter according to the Associated Press.

Shareholder Pressure and Board Considerations

The WBD board’s consideration of Paramount’s offer follows pressure from shareholders, including activist investor Ancora Capital, who have urged the board to explore all available options as noted by Fortune. Board members are now assessing whether Paramount’s revised terms represent a superior deal or could prompt Netflix to increase its offer according to CNBC.

Netflix’s Right to Match

If WBD decides to engage with Paramount, it is obligated to notify Netflix, giving the streaming giant an opportunity to improve its existing offer as reported by the New York Times. Netflix had previously improved its initial offer from a cash and stock deal to an all-cash transaction.

Timeline and Next Steps

WBD was tentatively planning a shareholder vote on the Netflix merger in April, but the timeline is now uncertain. Paramount’s tender offer to WBD shareholders, already extended twice, is set to expire on February 20. WBD and Paramount both declined to comment on the ongoing discussions.