Warner Bros. Discovery is reportedly reconsidering merger discussions with Paramount Skydance Corp. after receiving revised takeover terms, according to a report by Bloomberg News.
Sources familiar with the matter says members of Warner Bros.’ board are debating whether Paramount’s amended proposal could result in a superior transaction or potentially spark a renewed bidding contest with Netflix Inc.. The company remains bound by its existing agreement with Netflix, and no formal decision has been made.
Paramount’s updated proposal reportedly addresses key financial concerns. The studio has offered to cover the $2.8 billion termination fee Warner Bros. would owe Netflix if it walks away from the current agreement. It has also proposed backstopping Warner Bros.’ debt refinancing and compensating shareholders if the transaction fails to close by December 31, signaling confidence in regulatory approval.
Warner Bros. previously agreed to sell its namesake film studio and HBO Max streaming platform to Netflix in a deal valued at $27.75 per share. However, Paramount has launched a competing $30-per-share tender offer, directly appealing to shareholders while simultaneously lobbying regulators to approve its alternative transaction.
Both Paramount and Netflix have indicated a willingness to improve their bids if necessary. Paramount CEO David Ellison has publicly stated that the current offer is not necessarily final, while Netflix executives have also suggested flexibility in pricing.
Still, market pressures are mounting. Netflix shares have fallen sharply in recent months, reflecting investor concerns about the scale and cost of the Warner Bros. acquisition. Analysts note that while both companies are motivated to secure the deal, neither wants to overpay.
Chris Marangi, co-chief investment officer at Gabelli Funds, said the revised Paramount proposal shows creativity in deal structuring but added that investors would prefer a higher bid. Several Warner Bros. shareholders, including Pentwater Capital Management and Ancora Holdings Group, have publicly urged the board to engage with Paramount.
Despite that pressure, shareholder participation in Paramount’s tender offer has been limited so far, with fewer than 2% of outstanding shares committed.
If Warner Bros. formally re-engages with Paramount, it would first need to notify Netflix under the terms of their agreement. Netflix would retain the right to match any superior offer that emerges.
With regulatory scrutiny, shareholder activism, and competitive bidding all in play, Warner Bros.’ next move could determine the future landscape of the US media and streaming industry.
Erizia Rubyjeana
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