Warner Bros Discovery on Tuesday announced it is considering an enhanced proposal from Paramount Skydance, though the company did not disclose the monetary details of the offer. The announcement comes as Paramount, the CBS owner, vies with Netflix for control of Warner Bros' studio and streaming assets in a rapidly escalating takeover fight.
The renewed bid follows a week of discussions between Warner Bros and Paramount that sought to resolve issues that had led the HBO parent to previously reject Paramount’s overtures. Warner Bros had earlier favored Netflix’s agreement to acquire its studio and streaming businesses at $27.75 per share - a transaction valued at $82.7 billion - over earlier offers from Paramount.
In a statement, Warner Bros made clear that the Netflix transaction remains active and that its board continues to support the Netflix deal, advising shareholders not to act on the amended PSKY tender offer at this time. The company said: "The Netflix merger agreement remains in effect and the Board continues to recommend in favor of the Netflix transaction. WBD shareholders are advised not to take any action at this time with respect to the amended PSKY tender offer."
Under terms agreed in December, if Warner Bros' board determines the Paramount proposal is superior to the Netflix agreement, Netflix would have four days to decide whether to revise its offer in response. Either outcome - a Netflix-led acquisition or a Paramount Skydance takeover - would transfer ownership of one of Hollywood’s most valuable studios and its deep content library, including major franchises such as "Game of Thrones", "Harry Potter" and DC Comics.
Netflix retains considerable cash resources and has the option to increase its purchase price for the HBO Max owner. Company supporters have argued the Netflix proposal represents greater value in part because it would involve spinning off Warner Bros’ cable assets prior to consummation of the acquisition.
Paramount’s approach differs materially: it has proposed buying Warner Bros in full, including the television units, asserting that the cable assets hold minimal value. Paramount’s prior offer was $30 per share in cash, which the company stated equates to $108.4 billion when accounting for debt.
Paramount, led by CEO David Ellison, has signaled confidence in its path to regulatory approval, citing close ties to the Trump administration as part of its rationale for a clearer approval route. To address shareholder concerns, Paramount has pledged to cover the $2.8 billion termination fee Warner Bros would be obligated to pay Netflix if the Netflix agreement is abandoned. Paramount has also proposed paying roughly $650 million in additional cash for each quarter the transaction does not close after this year.
Warner Bros’ reopening of discussions with Paramount follows pressure from activist investor Ancora Capital. Ancora, which built an approximately $200 million stake in the company, accused Warner Bros’ board of failing to sufficiently engage with Paramount and argued the board had agreed to an inferior deal while depending on a risky spinoff. Ancora said it would vote against the Netflix transaction if Warner Bros refused to resume talks with Paramount.
Analysts at MoffettNathanson have previously indicated that a Paramount bid near $34 per share could terminate the competitive process and prevent further debate over the value of Discovery Global. Warner Bros’ own estimates place Discovery Global’s potential value in a range between $1.33 and $6.86 per share.
Shareholders of Warner Bros Discovery were earlier informed that a vote on the Netflix transaction is scheduled for March 20. Until the board makes a determination on the amended Paramount proposal, the Netflix merger agreement remains the recommended course of action.