Warner Bros. Discovery May Reopen Paramount Talks

The “state of play” for Warner Bros. Discovery (WBD) has changed dramatically with the change which started in the early hours of today, with the board allegedly thinking about resuming sale negotiations with Paramount Skydance. This comes after a number of “sweeteners” were added to David Ellison’s hostile offer in an attempt to sabotage WBD’s current Netflix deal.

The Ellison family’s most recent offer, which contained some major concessions, may lead Warner Bros. Discovery to announce as early as Tuesday that it will work with Paramount, according to information obtained by Deadline.

Although WBD and Netflix have a formal agreement, Par has been making unsolicited buyout approaches, all of which have so far been flatly turned down. Some WBD shareholders, particularly activist investor Ancora Capital, became outspoken in their demands that the board take into account all available choices after the bid was modified with a number of sweeteners.

In its cliched statement last week, WBD stated that it was continuing to work with Netflix while examining the revised offer from Paramount.

Netflix has reached a deal to buy Warner Bros. Studios and its streaming business for $27.75 per share in cash. In the face of constant pressure, the massive streamer had upgraded that from an initial cash and stock transaction. Paramount made a public tender offer straight to WBD shareholders shortly after Warner and Netflix finalised their agreement. The deadline, which has already been extended twice, is February 20.

SEC papers indicate that Warner was speculatively organising a special shareholders meeting to vote on the Netflix merger sometime in April, although it’s unclear at this point exactly where that is going.

For all of WBD, Paramount is making a cash offer of $30 per share. Its most recent offer included a new $0.25 per share “ticking fee” that WBD shareholders would have to pay for every quarter after December 31, 2026, when the deal hasn’t been finalised. The company claimed that this amount equates to around $650 million in cash value every quarter. Additionally, it agreed to pay Netflix a $2.8 billion termination fee and made a number of concessions on WBD’s debt financing commitments and expenditures. That deal is still not considered Paramount’s last and best offer.

Of particular significance advancements in the WBD sale procedure are that 

• Paramount’s Enhanced Offer: Paramount included a “ticking fee” of $0.25 per share (about $650 million) for each quarter after 2026 that the deal is not finalised, while keeping the headline price of $30 per share ($108.4 billion overall).
• Termination Fee Coverage: In the event that Netflix terminates their present contract, WBD would owe Netflix a $2.8 billion breakup fee, which Paramount has agreed to cover.
• Shareholder Pressure: Asserting that Paramount offers greater guaranteed value and incorporates WBD’s cable assets (such as CNN and TNT), activist investors such as Ancora Holdings Group and Pentwater Capital Management have pushed the board to work with it.
• Regulatory Confidence: Oracle co-founder Larry Ellison offered an irrevocable personal guarantee of $40.4 billion to support the transaction in order to allay worries about antitrust obstacles.

In light of the fact that the $83 billion Netflix purchase only includes WBD’s studio and streaming assets, not the full firm, the WBD board is currently considering whether this revised proposal represents a “superior transaction” in comparison.

Looking at the comparison of the current bid between Netflix and Paramount Skydance, it seems to favour Paramount Skydance more.

It is anticipated that WBD will either formally respond or inform Netflix of its intention to work with Paramount as early as this week.

Netflix became a strong competitor for the purchase of WBD since the third quarter of 2025, when it had reportedly prepared Warner Bros’ bid. However, there had been several back-and-forths on the deal.