On Thursday, Warner Bros. Discovery said Paramount Skydance’s latest proposal of $31 per share qualifies as a “Company Superior Proposal” under its existing merger agreement with Netflix.

That decision gave Netflix four business days to respond with a better offer, but Netflix chose not to.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” said Netflix co-CEOs Ted Sarandos and Greg Peters in a statement.

“However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”

Warner Bros. Discovery must now pay Netflix a $2.8 billion termination fee to exit their agreement, however, Paramount Skydance has agreed to cover that cost as part of its revised bid.

The offer values Warner Bros. Discovery at about $111 billion. It includes the company’s film and television studios, HBO, its streaming platforms, gaming arm and cable networks such as CNN, TNT, TBS, Discovery and HGTV.

Paramount itself was acquired last year by Skydance Media, controlled by David Ellison. The deal was backed by his father, Larry Ellison, the executive chair of Oracle and one of the world’s richest men.

Larry Ellison has agreed to provide additional equity if required to support the financing.

Paramount will also take on roughly $33 billion of Warner Bros Discovery’s debt. The acquisition is backed by a $57.5 billion debt commitment from Bank of America Merrill Lynch, Citi and Apollo Global Management.

Netflix first moved on Warner Bros. Discovery in December with an offer worth nearly $83 billion for its studios and streaming business. Paramount countered several times.

At one point, it offered $108 billion for the full company, including its traditional television networks. Its latest $31-per-share bid ultimately prevailed.

Warner Bros. Discovery’s board said it reached its decision after consulting independent financial and legal advisers. While the Netflix agreement is technically still in place during the notice period, the board confirmed it has informed Netflix of its determination.

David Ellison has already warned that job cuts are likely once the transaction closes. His growing influence in news media has drawn attention, especially following changes at CBS, another asset under his control. Larry Ellison is a primary donor and supporter of President Donald Trump.

Shortly after, Netflix shares rose by as much as 10% in after-hours trading in New York while Paramount shares gained about 4.5%.

Warner Bros. Discovery has filed the required documents with the US Securities and Exchange Commission in relation to both the Paramount tender offer and its earlier agreement with Netflix.

Shareholders have been advised to review those filings in full before taking any action.

A source familiar with the matter said the revised bid improves on Paramount’s earlier $30 per share all-cash proposal, which valued the company at about $108.4 billion.

The exact terms of the new offer were not disclosed, but analysts expect it could fall between $31 and $34 per share.

Warner Bros shareholders are due to vote on Netflix’s $82.7 billion cash offer, priced at $27.75 per share, on 20 March 2026. Under the terms of that agreement, Netflix has the right to match any superior proposal.

Warner Bros’ board had asked Paramount to submit its “best and final offer” after rejecting a previous enhanced bid. That earlier proposal included covering Netflix’s $2.8 billion termination fee and adding a quarterly 25-cent per share ticking fee from next year to compensate investors for any delay in closing the deal.

The board said on February 10 that the offer still fell short and set a seven-day deadline for a revised bid.

Neither Warner Bros nor Paramount commented, and Netflix did not immediately respond to a request for comment.

The case centres on some of the most valuable assets in entertainment, including the Harry Potter and Game of Thrones franchises, as well as the HBO Max streaming platform.

Warner Bros also plans to spin off cable television assets such as CNN and HGTV into a separate company, Discovery Global. The company estimates the spin-off could be worth between $1.33 and $6.86 per share.

Netflix argues its proposal offers shareholders additional upside from the planned separation. Paramount, however, has said the cable spin-off that underpins Netflix’s case is effectively worthless.

Regulators are already reviewing the competing bids, with the U.S. Department of Justice examining whether Netflix’s proposal leads to antitrust concerns, including its claim that it needs Warner Bros to compete with YouTube, the most-watched distributor on American television screens.

As part of that review, officials are also looking at whether Netflix engaged in anti-competitive practices.

Paramount says it has secured foreign investment clearance in Germany and is in discussions with regulators in the United States, the European Union and the United Kingdom. The company maintains it has a clearer path to approval than Netflix.

Lawmakers in Washington have also spoken. Some Democratic senators warned that a Paramount deal would give the Ellison family control over CNN and CBS and could concentrate too much power over what Americans watch on television.

Others said either transaction could reduce consumer choice and harm creative workers.

For Netflix, a merger with HBO Max would create the largest global streaming platform, with roughly half a billion subscribers.

Co-chief executive Ted Sarandos has said the combination would be better for Hollywood because it would avoid job cuts in an industry already under stress from fewer productions and uneven box office returns.

He has also said consumers could benefit from lower prices through bundled offerings.

Paramount’s bid is backed by Larry Ellison’s financial support and ties to Oracle. Netflix, by contrast, has pointed to its strong cash reserves and the flexibility to raise its offer if necessary.

Investors such as Ancora Capital have accumulated a roughly $200 million stake in Warner Bros and are urging the board to engage more seriously with Paramount.

The activist investor warned that if the company refuses to reopen discussions, it will vote against the Netflix deal and hold directors accountable at the annual meeting.

Analysts at MoffettNathanson said earlier that an offer around $34 per share from Paramount would likely end the bidding war and “avoid further debate over Discovery Global’s value.”

Shares of Paramount rose 1.3% to $10.70 in extended trading following news of the revised bid.

The outcome now rests with Warner Bros shareholders. A vote in favour of Netflix would move that deal forward, though it would still face detailed reviews by competition authorities in the United States and Europe.

If Paramount’s higher offer is deemed superior, the board will have to decide whether to change its recommendation.

This comes nearly two months after Warner Bros rejected Paramount’s initial $30-a-share bid in favour of a deal to sell its streaming and studio businesses to Netflix.

Warner Bros’ board said Paramount has addressed many issues noted in previous offers. “To be clear, our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger,” Warner Bros Chairman Samuel DiPiazza Jr. and CEO David Zaslav wrote in a letter to Paramount.

“We continue to recommend and remain fully committed to our transaction with Netflix.”

Warner Bros. Discovery Board Weighs Paramount’s Sweetened $30 Per Share Bid

Paramount has offered to increase its bid to $31 per share if Warner Bros agrees to open formal talks. The company has also provided a personal guarantee of $40 billion in equity from Oracle founder Larry Ellison, father of Paramount CEO David Ellison.

Warner Bros said it expects Paramount’s best and final offer to exceed that amount.

Paramount’s latest attempt to win over shareholders includes extra cash for each quarter the deal fails to close and covering the $2.8 billion breakup fee Warner Bros would owe Netflix if the merger falls through.

Despite these concessions, Warner Bros said Paramount’s offer still leaves important issues unresolved, including coverage of potential $1.5 billion junior lien financing fees and full certainty of equity funding.

The Netflix deal, which values Warner Bros’ studios and streaming assets at $82.7 billion, is still the board’s recommended option.

Shareholders are scheduled to vote on the merger on March 20, after Warner Bros spins off its Discovery Global cable operations into a separate public company.

Discovery Global includes CNN, TLC, Food Network, and HGTV and could fetch between $1.33 and $6.86 per share, according to Warner Bros estimates.

Paramount has also pushed to nominate directors to Warner Bros’ board, with Pentwater Capital CEO Matt Halbower among potential candidates. “Every substantive complaint that the Warner Bros board had with Paramount’s previous offer has been addressed,” Halbower said last week.

Activist investor Ancora Holdings, which owns nearly $200 million in Warner Bros shares, has urged the company to fully engage with Paramount’s proposal. Netflix, meanwhile, acknowledged the renewed talks but reaffirmed its confidence in the merger.

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

Paramount Skydance’s market value stands at $11.1 billion, with shares trading around $10.32. Warner Bros Discovery’s market cap is roughly $69.4 billion, with shares at $27.99.

Netflix is by far larger at $324.6 billion, trading near $76.87. Analysts say this scale explains why the Netflix offer is seen as more stable despite its lower total dollar value.

The development comes weeks after Warner Bros. Discovery agreed to sell its film studio and HBO Max streaming service to Netflix for $27.75 per share. 

That deal, signed in December 2025, values the company at about $83 billion.

Soon after, Paramount Skydance, which owns CBS and MTV, launched a hostile all-cash bid of $30 per share. The offer values Warner Bros. at $108.4 billion, including debt.

Last week, Paramount revised its proposal but did not increase the $30 per share price. Instead, it introduced new financial incentives. 

The company said it would pay shareholders a 25-cent-per-share quarterly “ticking fee” starting in 2027 for every quarter the deal is still pending after 31 December 2026. That payment would amount to roughly $650 million in cash per quarter.

Paramount also agreed to cover the $2.8 billion termination fee Warner Bros. would owe Netflix if it walks away from their agreement. In addition, it pledged to eliminate $1.5 billion in potential refinancing costs.

According to Bloomberg, members of the Warner Bros. board are discussing whether Paramount’s latest proposal could lead to a stronger result for shareholders. The board has not reached a decision and may still proceed with the Netflix deal.

Paramount, Warner Bros. Discovery and Netflix did not respond to requests for comment.

Both bidders are pursuing Warner Bros. for its film and television studios, vast content library and major franchises. These include Game of Thrones, Harry Potter and DC Comics superheroes such as Batman and Superman. The company’s streaming platform, HBO Max, is also a key asset.

Shareholders, including Ancora Holdings, which holds a stake of nearly $200 million, has said it plans to oppose the Netflix transaction. The firm argues that the board did not engage sufficiently with Paramount over what it considers a superior offer.

Both Netflix and Paramount have indicated they are willing to improve their terms to secure the deal, Bloomberg reported. The board is currently reviewing its options.

In a letter to shareholders on Wednesday, the board urged investors to stick with the company’s existing $82.7 billion deal with Netflix, noting that Paramount’s financing was highly uncertain and laden with execution risks.

Paramount’s proposal, backed in part by Oracle co-founder Larry Ellison’s $40 billion personal guarantee and $54 billion in debt, would represent the largest leveraged buyout in Hollywood history. 

Warner Bros’ board said the structure “remains inadequate particularly given the insufficient value it would provide, the lack of certainty in PSKY’s ability to complete the offer, and the risks and costs borne by WBD shareholders should PSKY fail to complete the offer.”

Netflix’s competing offer, though smaller in headline value at $27.75 per share in cash and stock, comes with a clear financing plan and investment-grade balance sheet. 

Its $400 billion market capitalisation and estimated $12 billion free cash flow for 2026 give Warner Bros confidence that the merger can close smoothly. 

Netflix co-CEOs Ted Sarandos and Greg Peters welcomed the board’s decision, saying it recognises their deal “as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry.”

Warner Bros owns some of Hollywood’s most valuable franchises, including Harry Potter, Game of Thrones, Friends, and the DC Comics universe, along with classic films such as Casablanca and Citizen Kane. 

Paramount, with a market capitalisation of roughly $14 billion, would have to take on debt far exceeding its current size, and the board says that could affect the studio’s operations and credit rating.

Chairman Samuel Di Piazza told CNBC that while Warner Bros is not currently in talks with Paramount, the company is still open to a better offer. “From our perspective, they’ve got to put something on the table that is compelling,” he said. 

Warner Bros has already calculated the costs of breaking its Netflix agreement, estimating nearly $4.7 billion in combined termination fees and financing expenses if it were to abandon that deal.

The board also noted operational risks with a Paramount takeover, including potential restrictions on Warner Bros’ cable network spin-off, Discovery Global, and other moves. 

Analysts say Netflix’s simpler financing structure and lower execution risk make it the safer choice, even if Paramount continues to submit revised bids. 

Ross Benes, an analyst at Emarketer, noted: “WBD does not want to sell to Paramount, so it will keep rejecting Paramount as long as it is able to. But this process is not over … Paramount will have the opportunity to make further attempts.”

Paramount argues its bid may face fewer regulatory issues, but Warner Bros and its investors are unconvinced that the smaller studio could manage such a massive acquisition without jeopardising its business.

Warner Bros shares slipped slightly in premarket trading following the announcement, while Netflix edged higher and Paramount stayed largely unchanged.