A new twist in the takeover battle
Warner Bros. Discovery’s board is weighing whether to reopen negotiations with Paramount Skydance after receiving a revised proposal that strengthens financial terms, according to a report citing people familiar with the matter. The development adds a new chapter to an increasingly competitive bidding process centered on the media giant’s studio and streaming assets.
In December, Warner Bros. agreed to sell its film studio and HBO Max streaming platform to Netflix for $27.75 per share. Shortly afterward, Paramount, the owner of CBS and MTV, launched a hostile all-cash offer valued at $30 per share, putting pressure on Warner’s board to reassess the agreed deal.
Paramount sweetens its offer
Paramount has now enhanced its proposal by introducing a “ticking fee” of 25 cents per share if regulatory approval delays the transaction. That fee would amount to roughly $650 million in additional cash value per quarter for each quarter the deal remains unclosed after December 31, 2026.
Beyond the ticking fee, Paramount said it would absorb Warner’s $2.8 billion termination fee owed to Netflix if the existing agreement is scrapped. The company also pledged to eliminate an estimated $1.5 billion in potential debt refinancing costs, further improving the economics of its proposal for shareholders.
These concessions significantly increase the certainty and net proceeds of Paramount’s offer, potentially narrowing the gap between headline price and effective value.
Netflix may counter
Both Paramount and Netflix have indicated a willingness to improve their bids to secure Warner Bros. assets. However, reports suggest this is the first time Warner’s board is actively evaluating whether Paramount’s enhanced offer could either result in a superior transaction outright or prompt Netflix to return with more favorable terms.
That dynamic places Warner’s directors in a delicate position. On one hand, they must consider fiduciary duties to maximize shareholder value. On the other, they must weigh deal certainty, regulatory risks and integration challenges associated with each bidder.
Strategic implications
The outcome carries significant implications for the media landscape. A Netflix acquisition would expand its content production capabilities and strengthen its control over premium intellectual property. A Paramount deal, by contrast, could reshape traditional media consolidation efforts by bringing together broadcast networks, cable brands and film studios under a single umbrella.
With both bidders reportedly prepared to adjust their terms, the board’s decision could hinge less on price alone and more on execution risk and long-term strategic alignment. For now, Warner’s willingness to reconsider signals that the takeover contest is far from settled.
