We still support Netflix: Warner Bros Discovery rejects Paramount's latest offer, gives 7-day deadline to revise bid

Warner Bros. Discovery (WBD) has reportedly rejected Paramount-Skydance's latest $30-per-share takeover bid. However, WBD is giving the Hollywood studio seven days to submit a better offer to acquire the owner of HBO Max and the Harry Potter franchise. According to a report by the news agency Reuters, the rival bidder has until February 23 to submit its “best and final offer”, which Netflix is allowed to match under the terms of the merger agreement. This comes after Paramount informally raised the prospect of an even higher share price of $31, which appeared to bring WBD to the table. However, WBD made clear in its response that it still prefers the Netflix deal, with the chances of a switch remaining low.

In a recent letter sent to the Paramount board (seen by Reuters), WBD Chairman Samuel DiPiazza Jr and CEO David Zaslav wrote, “Our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger. We continue to recommend and remain fully committed to our transaction with Netflix.”

The two media companies have been competing for control of WBD, including its film and TV studios and extensive content library, reflecting the pressures created by ongoing changes in the entertainment industry.

What Warner Bros said to Paramount about revising its offer

An unidentified Paramount financial advisor told Reuters that the company’s offer would be raised to $31 per share if WBD agreed to open negotiations and could go even higher. In the letter to Paramount, WBD added that it now expects a best-and-final proposal to include a price above that amount.

Paramount's current offer for the entire company is $108.4 billion, while Netflix is offering $27.75 per share, or $82.7 billion, for its studio and streaming businesses only.

WBD, which has repeatedly rejected Paramount's offers to buy the entire company, is moving forward with a vote on Netflix's bid for its studio and streaming services.

The company’s shareholders will vote on March 20 on the Netflix merger, which would occur after WBD spins off its Discovery Global cable operations, including CNN, TLC, Food Network, and HGTV, into a separate, publicly traded company.

Previously, Paramount said the WBD board “never meaningfully engaged” with them across six different offers made in the 12 weeks before WBD announced its Netflix merger agreement on December 5, 2025

A public hostile bid launched by Paramount days later was rejected later that month, and a revised offer that included a personal guarantee on $40 billion in equity from Oracle founder Larry Ellison was turned down in early January.

WBD also faces pressure from activist investor Ancora Holdings, which has built a stake in the company and plans to oppose the Netflix transaction.

Paramount is even pressing to add directors to the WBD board, with Pentwater Capital Management CEO Matt Halbower cited as a potential nominee. Pentwater, which owns about 50 million shares of WBD, has backed Paramount's bid.

"Every substantive complaint that the Warner Bros board had with Paramount's previous offer has been addressed," Halbower said.

To open talks with Paramount, WBD secured a special waiver from Netflix, which allows limited negotiations with a rival bidder if the board believes the offer could be superior. Netflix said it remains confident in its deal.

“While we are confident that our transaction provides superior value and certainty, we recognise the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY's antics,” Netflix told Reuters.

WBD said Paramount's amended merger agreement still falls short of what its board would consider a superior proposal, with key issues remaining unresolved, including who would cover a potential $1.5 billion junior lien financing fee, what happens if debt financing falls through, and whether equity funding backed by Larry Ellison is fully certain.

The letter noted that while Paramount has argued financing concerns are “not serious” given the “personal wealth of your lead equity sponsor and the credibility of your lending banks,” draft agreements now require that additional equity be funded if debt financing becomes unavailable.

Ancora, which holds a stake worth nearly $200 million, said the WBD board did not adequately engage with Paramount and Skydance regarding its rival offer for the entire company, including cable assets such as CNN and TNT.