Warner Bros reopens Paramount talks as bidding war escalates
Warner Bros Discovery has resumed talks with Paramount Skydance, reigniting the takeover battle with Netflix for one of Hollywood’s most sought-after studios.
WBD confirmed it is entering seven days of deal discussions with the David Ellison-backed group, even as it continues to stand by its agreed $82.7bn (£60.94bn) deal with Netflix.
The move follows months of pressure from Paramount, which has repeatedly tabled unsolicited $30-a-share all-cash offers for the media giant, all previously rejected.
The latest move came after Paramount indicated it would be prepared to raise its bid if formal talks were opened.
In a letter released by WBD, the board said: “On February 11th, a senior representative of your financial advisor communicated orally to a member of our Board that PSKY [Paramount Skydance] would agree to pay $31 per WBD share if we engage with you, and that $31 is not PSKY’s best and final proposal.”
That shows Paramount could lift its headline valuation beyond the current $108.4bn, intensifying the contest.
Paramount had already sweetened its approach in recent weeks, adding a 25-cent-per-share quarterly ticking fee, worth roughly $650m in cash each quarter, if the transaction fails to close beyond the end of 2026.
It had also committed to cover WBD’s $2.8bn break fee payable to Netflix and up to $1.5bn in refinancing costs.
The original per-share offer of $30 in cash already sits above Netflix’s $27.75 all-cash bid, which was itself improved from an earlier mix of cash and stock.
Under Netflix’s agreement, the streaming giant would acquire Warner’s studios and streaming assets, such as Warner Bros, HBO and franchises such as Harry Potter and Game of Thrones.
Meanwhile, it could spin off the company’s global networks, including CNN and Discovery, to existing shareholders.
Paramount, on the other hand is seeking to buy the entire group, including its cable operations.
Streaming giant under pressure
WBD has so far stood publicly behind the Netflix deal, but Bloomberg reported that directors are now debating whether Paramount’s revised offer could represent a better outcome for shareholders.
Any formal, public talks with Paramount would require WBD to notify Netflix, which could in turn lead to further sweetening on both sides.
Ancora Holdings, which has built a near $200m stake, has openly opposed the Netflix deal, arguing the board failed to engage seriously with Paramount.
Still, shareholders representing less than two per cent of WBD’s stock have so far tendered in support of Paramount’s offer.
What’s more, the hostile bid’s deadline has already been extended twice to 20 February.
Concerns linger within the Warner board over Paramount’s financing structure, which involves private equity backing and support from the Saudi sovereign wealth fund
Directors have previously questioned the equity backing, as well as the balance sheet strength behind the offer.
Elsewhere, regulatory concerns are casting a shadow over the Netflix transaction, as US antitrust officials raise concerns on competition in the sector. The process could stretch for months, and introduce further uncertainty.
Paramount maintains that it would face fewer competition hurdles, with chief executive David Ellison sating the pursuit reflected Paramount’s “strong and unwavering commitment to delivering the full value WBD shareholders deserve”. Warner has said it is reviewing the amended offer.