Bidding Battle Heats Up as Paramount Skydance Raises Offer for Warner Bros. Discovery

A bidding battle for Warner Bros. Discovery intensified Tuesday after the company's board revealed that Paramount Skydance's revised $31-per-share cash offer could "reasonably be expected" to result in a "superior proposal" to its existing merger agreement with Netflix.

The board stopped short of endorsing the new bid, stating it "has not made a determination" as to whether Paramount's proposal is actually superior. Instead, directors said they will continue discussions with Paramount to evaluate whether its terms meet the contractual definition of a "company superior proposal" under Warner Bros. Discovery's agreement with Netflix.

If the board ultimately reaches that conclusion, Netflix would have four business days to negotiate with Warner Bros. Discovery and propose revisions to its existing transaction, preserving its ability to counter.

Paramount welcomed the board's statement, saying it looks forward to engaging constructively with Warner Bros. Discovery to deliver the benefits of its proposal to shareholders, the creative community, and consumers.

The updated offer increases the price to $31 per share in cash, valuing the transaction at approximately $111 billion, including Warner Bros. Discovery's $33 billion debt load. Paramount also enhanced several financial protections. It accelerated the start of a 25-cent quarterly ticking fee to begin after September 30, 2026, increased its regulatory breakup fee to $7 billion, reaffirmed it would cover the $2.8 billion termination fee owed to Netflix if Warner Bros. Discovery exits that agreement, and pledged to eliminate roughly $1.5 billion in financing costs tied to Warner Bros. Discovery's debt exchange.

The proposal further commits additional equity funding if required by lenders and adopts a "company material adverse effect" definition that protects the deal price from potential declines in Warner Bros. Discovery's linear networks business.

Despite the richer terms, Warner Bros. Discovery emphasized that its nearly $83 billion agreement with Netflix remains in effect. The board continues to recommend shareholders approve that transaction at the March 20 vote and cautioned there is no assurance Paramount's bid will ultimately be deemed superior or that a new agreement will materialize.

Meanwhile, the proposed Netflix merger faces expanded regulatory scrutiny. The Justice Department has broadened its antitrust review of the deal. Addressing those concerns, Netflix chief legal counsel David Hyman stated, "Netflix operates in an extremely competitive market. Any claim that it is a monopolist or seeking to monopolize is unfounded. We neither hold monopoly power nor engage in exclusionary conduct, and we'll gladly cooperate, as we always do, with regulators on any concerns they may have."

Political attention has added further complexity. Over the weekend, Donald Trump posted that Netflix should "immediately fire" board member Susan Rice or "pay the consequences," injecting another layer of uncertainty into an already contentious transaction process.