Warner Bros. Discovery has agreed to open a brief window of negotiations with Paramount as a heated bidding battle for the media giant intensifies, even as the company continues to publicly back its merger agreement with Netflix.
For weeks, Paramount, operating through David Ellison's PSKY vehicle, has repeatedly offered $30 per share in cash for Warner Bros. Discovery. Each bid was rejected, prompting speculation across Wall Street and Hollywood about why the suitor would not simply increase its price.
Now, that increase appears to be on the table.
WBD announced Tuesday that it will enter into seven days of deal discussions with the Ellison-led group. According to the company, Paramount signaled a willingness to improve its offer if formal talks were allowed to proceed.
"On February 11th, a senior representative of your financial advisor communicated orally to a member of our Board that PSKY would agree to pay $31 per WBD share if we engage with you, and that $31 is not PSKY's best and final proposal," WBD's board said in a letter to Paramount it released today.
The company added that it has secured permission from Netflix to explore the competing bid within a limited timeframe.
"We are writing to inform you that Netflix has agreed to provide WBD a waiver of certain terms of the Netflix merger agreement to permit us, through February 23, to engage with PSKY to clarify your proposal, which we understand will include a WBD per share price higher than $31. We seek your best and final proposal."
Still, WBD made clear that opening discussions does not signal a shift in allegiance.
"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. We continue to recommend and remain fully committed to our transaction with Netflix and have scheduled a special meeting of our shareholders on March 20, 2026, to vote on the Netflix merger agreement."
The existing agreement with Netflix values WBD at $27.75 per share in cash. The offer was recently sweetened, moving from a mix of cash and stock to an all-cash structure. Under that deal, Netflix would acquire Warner Bros. Studios and the company’s streaming assets, while its linear television networks under Discovery Global would be spun off into a separate publicly traded company.
Paramount’s pursuit, however, has been anything but subtle. The company has launched an escalating string of hostile takeover bids for all of Warner Bros. Discovery, most recently reiterating its $30-per-share proposal on February 10 while layering in additional concessions and financial sweeteners designed to pressure the board. Some shareholders have reportedly encouraged WBD leadership, including CEO David Zaslav, to more seriously consider Ellison’s overtures.
Complicating matters, Netflix retains matching rights under its merger agreement, meaning it can counter any superior offer that emerges during the process.
For its part, Netflix expressed confidence in its transaction while acknowledging the turbulence created by the rival bid.
"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. Accordingly, we granted WBD a narrow seven-day waiver of certain obligations under our merger agreement to allow them to engage with PSKY to fully and finally resolve this matter."
The seven-day negotiation window now sets up a pivotal moment for the future of Warner Bros. Discovery. If Paramount delivers a materially higher bid, it could force the board to reconsider its recommendation. If not, the company appears prepared to move forward with its Netflix deal, with shareholders scheduled to vote next month.
Tags: warner bros. discovery, netflix, paramount, david ellison
