Warner Bros. Reopens Acquisition Talks as Paramount Boosts Bid
Warner Bros. Discovery Inc. has agreed to resume negotiations with rival Hollywood studio Paramount Skydance Corp. after the suitor proposed raising its acquisition bid and enhancing other terms of its offer. This development sets the stage for a renewed showdown with Netflix Inc., which Warner Bros. had previously identified as its preferred bidder.
Revised Terms and Negotiation Window
According to a statement released on Tuesday, Netflix has granted Warner Bros. a seven-day window to discuss Paramount's most recent proposal. The decision to reengage came after a Paramount banker informed a Warner Bros. board member that Paramount would offer at least US$31 per share, representing a US$1 per share increase over its previous bid, provided the company agreed to reopen talks. Warner Bros. is now requesting that these terms, along with other aspects of Paramount's new offer, be presented in writing for formal consideration.
"Throughout the entire process, our sole focus has been on maximizing value and certainty for WBD shareholders," stated Warner Bros. chief executive David Zaslav in the official announcement. "We are engaging with PSKY now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer."
Competing Acquisition Proposals
Warner Bros. has emphasized that its board continues to unanimously recommend shareholders vote in favor of its binding agreement with Netflix. That deal involves selling its namesake studios and HBO Max streaming business to Netflix for US$27.75 per share, totaling approximately US$72 billion. In contrast, Paramount's all-cash bid of US$77.9 billion, backed by billionaire Larry Ellison, encompasses the entirety of Warner Bros., including cable TV channels such as CNN and TNT. These assets would otherwise be spun off under the proposed arrangement with Netflix.
The company has scheduled a shareholder vote on the Netflix agreement for March 20. Under the terms of the waiver granted by Netflix, Warner Bros. can engage with Paramount until February 23. During this period, Warner Bros. plans to discuss unresolved deficiencies in Paramount's latest offer and has requested Paramount's best and final proposal. If the Warner Bros. board determines that Paramount has presented a superior proposal after negotiations, Netflix will retain the right to match Paramount's most recent offer to maintain its existing agreement.
Market Reaction and Historical Context
Following the announcement, Warner Bros. shares rose 2.5 percent in premarket trading in New York, while Paramount increased by approximately 2.7 percent and Netflix gained 1.2 percent. The decision to reengage with Paramount, which confirms earlier reporting, adds another twist to the prolonged saga for control of one of Hollywood's most iconic properties. The battle for Warner Bros., the century-old studio behind legendary films from Casablanca to Batman and hit TV series like Friends, represents one of the most significant media deals in recent years and possesses the potential to reshape the entire entertainment industry.
Strategic Implications for Bidders
Paramount Skydance, formed in August of last year through a combination with David Ellison's Skydance Media, views the acquisition as an opportunity to rapidly transform itself into a Hollywood powerhouse. A successful bid would enable Paramount to consolidate major entertainment assets and expand its market influence. Conversely, a victory for Netflix would represent a crowning achievement for the tech disruptor, potentially establishing it as the most dominant player in entertainment history by integrating Warner Bros.' extensive content library and production capabilities.
Both proposed deals face considerable regulatory hurdles, with each bidder confident in its ability to navigate these challenges more effectively than its competitor. Paramount has been pursuing Warner Bros. since September of last year, an effort that prompted Warner Bros. to formally put itself up for sale. After increasing its bid multiple times and ultimately losing to Netflix, Paramount mounted a hostile tender offer for Warner Bros. at US$30 per share and has amended its offer twice since then, addressing various concerns without raising its price until this latest proposal.
The ongoing negotiations highlight the intense competition within the media landscape as companies seek to consolidate assets and strengthen their positions in an increasingly digital and streaming-focused market. The outcome of this acquisition battle will have far-reaching implications for content creation, distribution, and the overall structure of the entertainment industry.
