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Warner Bros Discovery said Paramount’s sweetened $31-a-share offer to buy the studio and streaming group could best Netflix’s existing deal, a boon for the Ellison-backed media company’s takeover pursuit.
WBD on Tuesday said Paramount’s revised proposal of $31 a share in cash for the whole of WBD, as well as a guarantee to cover the $2.8bn termination fee owed to Netflix, could “reasonably be expected” to lead to a superior deal.
The verdict from WBD’s board comes after Paramount was given a seven-day period to restart talks with WBD, after Netflix granted the Hollywood group a waiver. That seven-day period concluded on Monday.
WBD stressed it had yet to conclude if Paramount’s sweetened offer could be deemed “superior” but would continue to negotiate with the company to see if a deal can be reached. In that circumstance, Netflix would have four business days to match Paramount’s offer.
Paramount’s improved offer also includes a $0.25 per share additional “ticking fee” for every quarter the transaction does not close after September 2026 and a $7bn break fee if the deal does not gain regulatory approval.
Netflix co-chief executive Ted Sarandos has not ruled out raising its own offer, said people familiar with the matter. However, these people added the company would maintain “discipline” when assessing whether to match a higher bid from Paramount.
The Ellison-backed group is trying to buy the whole of WBD including its cable television assets, while Netflix has a deal to pay $27.75 a share in cash for WBD’s studio and streaming assets excluding its cable TV business.
The latest development could kick-start a fresh bidding war between Paramount and Netflix for control of Warner Bros, one of the most valuable studios in Hollywood and owner of HBO as well as properties including Harry Potter, Friends and Game of Thrones.
The deal has been further complicated by President Donald Trump, who has suggested he would be involved in a regulatory review. Paramount’s bid is bankrolled by chief executive David Ellison’s father Larry. The Oracle co-founder is one of the world’s richest people and a Trump donor.
On Saturday the president lashed out at Netflix on social media, warning it should fire board member Susan Rice or “pay the consequences”. He also reposted an X post by Maga influencer Laura Loomer urging him to “kill the Netflix-Warner Bros. merger now”.
Rice was national security adviser and US ambassador to the UN under president Barack Obama. Sarandos played down Trump’s comments in a BBC interview on Monday: “This is a business deal. It’s not a political deal.”
Paramount cleared a critical US antitrust hurdle on Friday, saying it had complied with a Department of Justice review process. Netflix faces an early-stage review by the justice department to assess whether its deal to buy the studio would be anti-competitive.
Paramount executives argue regulatory risk should carry as much weight as the sticker price and believe they have the best bid on that front, said people familiar with the matter.