Warner Bros restarts bid talks with Paramount as Netflix grants 7-day waiver to 'fully and finally resolve this matter'

Warner Bros Discovery said on Tuesday that it will reopen talks with Paramount, which could lead to a bidding war between Netflix and Paramount for the entertainment giant.

Warner Bros said that Paramount had indicated it would be willing to offer $31 per share, up from its $30 offer, if Warner Bros agreed to engage in negotiations. Paramount last week had sweetened its all-cash hostile bid of $77.9 billion for the entire company, including cable channels CNN and TNT, per the Wall Street Journal.

Netflix has an agreement in place to acquire Warner Bros’ movie and TV studios, as well as its HBO Max streaming service, in an all-cash offer valued at $72 million. As part of the agreement, Netflix has the right to match any offer Warner takes from another bidder, and said in a statement that while it believes it has the superior offer, it has granted Warner a seven-day waiver of some obligations to engage with Paramount to "fully and finally resolve this matter."

“We have the only signed, board-recommended agreement” with Warner, Netflix said.

In Paramount’s latest offer, it said that it would pay the $2.8 billion termination fee imposed in the Netflix deal, and that it would add a "ticking fee" of 25 cents per share, payable to Warner Bros’ shareholders for each quarter its deal hasn’t closed, starting in January 2027.

Warner wrote in a letter to Paramount’s board of directors that Netflix had agreed to allow the company to discuss Paramount’s latest proposal, and that it was the board’s understanding that Paramount’s final offer would be higher than $31 per share, which was communicated orally to a Warner board member by a senior representative on behalf of Paramount.

Warner Bros Discovery Chief Executive David Zaslav said that the company is engaging with Paramount "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."

Warner, however, said it still favors Netflix’s offer, and said that it has set March 20 for a shareholder vote on the matter.

Warner Chairman Samuel A. Di Piazza Jr said, "We continue to believe the Netflix merger is in the best interests of WBD shareholders due to the tremendous value it provides, our clear path to achieve regulatory approval and the transaction’s protections for shareholders against downside risk."

Warner has raised concerns about covenants in Paramount's offer that the company claimed would be overbearing and impede its ability to operate prior to a deal closing, with Netflix’s deal having no such covenants.