Warner Bros Discovery announced Tuesday it is reviewing an enhanced proposal from Paramount Skydance, though the company did not reveal the financial terms of this latest offer as competition intensifies to acquire the entertainment giant.
According to a source with knowledge of the negotiations, Paramount’s newest proposal exceeds their earlier $30 per share cash offer, which totaled $108.4 billion when including debt obligations for the complete acquisition of Warner Bros.
This enhanced bid emerged after a week of intensive negotiations between the companies aimed at resolving issues that led the HBO parent company to initially dismiss Paramount’s previous proposals in favor of Netflix’s existing agreement valued at $27.75 per share, or $82.7 billion, covering the studio and streaming divisions.
Warner Bros released a statement confirming, “The Netflix merger agreement remains in effect and the Board continues to recommend in favor of the Netflix transaction.”
Neither Netflix nor Paramount provided immediate responses when contacted for comment. Stock prices for all three companies showed modest gains of 0.4% to 0.6% during premarket trading sessions.
Industry analysts from MoffettNathanson suggest that a Paramount offer around $34 per share would likely conclude the competitive bidding process and “avoid further debate over Discovery Global’s value.”
Warner Bros estimates indicate Discovery Global’s worth could range from $1.33 to $6.86 per share.
Should Warner Bros determine Paramount’s revised offer surpasses the Netflix agreement, the streaming service would have a four-day window to counter-respond under terms established in December’s initial deal.
This high-stakes competition will fundamentally alter Hollywood’s power dynamics by granting the winning bidder control of one of the industry’s most prestigious studios, along with an extensive content catalog featuring major properties including “Game of Thrones,” “Harry Potter,” and DC Comics franchises.
Netflix possesses substantial financial resources and could potentially increase its current offer for the HBO Max parent company. The streaming giant contends its proposal delivers superior investor value partly through spinning off Warner Bros cable properties prior to completing the acquisition.
Paramount, which has proposed purchasing Warner Bros in its entirety including television assets, maintains that the cable properties hold minimal value.
Under CEO David Ellison’s leadership, the CBS parent company believes it has better prospects for securing U.S. regulatory clearance due to established connections with the Trump administration.
To address investor concerns, Paramount has committed to covering the $2.8 billion termination fee Warner Bros would owe Netflix if that agreement is abandoned, plus approximately $650 million additional cash compensation for each quarter beyond this year that deal completion is delayed.
Warner Bros’ renewed discussions with Paramount also stem from pressure by Ancora Capital, an activist investor that accumulated roughly $200 million in HBO owner shares while criticizing the company for inadequately engaging with Paramount’s proposals.
The investment firm condemned Warner Bros’ board for accepting what it considers an inferior agreement and risking an uncertain spinoff strategy. Ancora Capital has pledged to oppose the Netflix deal unless Warner Bros resumes meaningful negotiations with Paramount.
Warner Bros shareholders received notification earlier this month that a shareholder vote regarding the Netflix transaction is scheduled for March 20.
