The takeover battle for Warner Bros. Discovery is intensifying. According to a Monday media report citing industry sources, Paramount Skydance Corp is expected to submit a bid to acquire Warner Bros. Discovery in its entirety for $32 per share. The report indicated that Warner Bros. Discovery agreed last week to re-engage in negotiations with Paramount, seeking a "final and best" offer. Previously, a Paramount executive had informed members of Warner Bros.' board that if the parent company of HBO returned to the table, Paramount was willing to increase its offer to over $31 per share, clarifying that this bid was not final. Subsequently, Warner Bros. set a 7-day response deadline for Paramount, expiring at 23:59 Eastern Time on February 23.
Notably, Paramount's latest offer includes more attractive terms. The report stated that Paramount CEO David Ellison proposed an "escalating compensation fee" of at least $650 million per quarter to Warner Bros. shareholders if the transaction fails to receive regulatory approval after 2026. Additionally, Paramount agreed to bear a $2.5 billion termination fee, payable under certain circumstances to relevant parties, including Netflix.
As another key party in the deal, Netflix's stance is also under market scrutiny. In an interview with journalist Cynthia Littleton last Friday, Netflix Co-CEO Ted Sarandos did not explicitly state how the company would respond if Paramount increased its offer. However, he emphasized that Netflix has a reputation as a "highly disciplined buyer," with a history of walking away from bidding wars and letting others "overpay." Sarandos stated, "The next move depends on others. We have an agreement with Warner Bros. If someone presents a superior proposal—and the Warner Bros. board has indicated this hasn't happened yet—then let the process proceed. But I won't comment on bidding strategy." He reiterated that Netflix is not opposed to abandoning the deal if the price becomes unsuitable.
Regarding regulatory progress, Paramount disclosed in a Friday filing with the U.S. Securities and Exchange Commission that its all-cash offer for Warner Bros. has passed the 10-day waiting period mandated by the Hart-Scott-Rodino Antitrust Act. Paramount stated this means there are no legal obstacles to completing the acquisition within the United States. However, according to the terms of the prior agreement between Netflix and Warner Bros., Netflix retains the right to match any competing offer. Warner Bros. plans to hold a special shareholder meeting on March 20 to vote on the transaction related to Netflix.
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