Warner Bros. Discovery (NASDAQ:WBD) shares slipped about 1% in after-hours trading on Tuesday following the company's disclosure of a revised acquisition offer from Paramount Skydance (NASDAQ:PSKY). At the same time, Netflix (NASDAQ:NFLX) shares moved higher, up about 1.5% in extended trading.
The Board of Directors at Warner Bros. Discovery said it concluded the amended proposal from Paramount Skydance could reasonably be expected to lead to a "Company Superior Proposal" as that term is defined in Warner Bros. Discovery's existing merger agreement with Netflix. The company released specific elements of that revised proposal as part of the disclosure.
The Paramount Skydance proposal includes a cash purchase price of $31.00 per WBD share. The proposal also contains a timing-related fee described in the disclosure as "a daily ticking fee equal to $0.25 per quarter beginning after September 30, 2026." In addition, Paramount Skydance has proposed a $7 billion regulatory termination fee payable if the transaction fails to close because of regulatory obstacles. The revised proposal also contemplates payment of the $2.8 billion termination fee that Warner Bros. Discovery would owe to Netflix if the company were to terminate the Netflix merger agreement.
Warner Bros. Discovery's Board has not made a determination that the Paramount Skydance proposal is superior to the Netflix transaction. The Board said it will continue discussions with Paramount Skydance to evaluate whether a superior proposal can be negotiated. The company noted that, should the Board ultimately conclude a superior proposal has been received, Netflix would have four business days to engage and propose revisions to its own transaction.
The existing merger agreement with Netflix remains in force. Warner Bros. Discovery's Board continues to recommend the Netflix transaction and has not withdrawn or altered that recommendation. The company emphasized that there is no assurance the Board will find the Paramount Skydance offer to be superior, nor that ongoing talks will produce any definitive agreement.
Market context and implications
The disclosure prompted modest after-hours moves in the stock of the companies directly involved. Beyond the immediate price reactions, the announcement keeps the merger process active and introduces further conditionality tied to regulatory outcomes and the Board's assessment of competing proposals.