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Paramount increases offer to acquire Warner Bros Discovery
Paramount Global has elevated its bid for Warner Bros Discovery to $31 per share, intensifying competition with Netflix for control of the media conglomerate. The revised proposal includes financial safeguards and could prompt Netflix to reconsider its existing agreement.
Background of the bidding war
Warner Bros Discovery put itself on the market last year, attracting interest from multiple suitors. In December, the company announced a $82 billion deal with Netflix, valuing shares at $27.75 each. The agreement included the sale of Warner's film and streaming divisions, such as HBO, while spinning off remaining assets-including CNN and traditional TV networks-into a separate entity.
Paramount's revised proposal
Backed by tech billionaire Larry Ellison and led by his son David, Paramount had previously offered $30 per share for full ownership of Warner Bros. After repeated rejections, the company has now increased its bid to $31 per share in cash. The offer also includes a $7 billion breakup fee if the deal collapses and covers the $2.8 billion termination fee Warner Bros agreed to pay Netflix in case of a failed merger.
Warner Bros stated that its board views the new bid as a "superior proposal" but has not yet made a final decision. The company will engage in further discussions before determining whether to abandon its agreement with Netflix, which has four days to submit a counteroffer.
Netflix's stance and industry reactions
Netflix has not commented on the latest development. In a recent BBC interview, co-CEO Ted Sarandos declined to speculate on whether the company would enter a bidding war, calling the negotiations "part of the process." He emphasized Netflix's preference for its current deal but acknowledged the dynamic nature of price discovery in mergers.
"We very much like the deal where we're at right now. We're very disciplined buyers and we always have been."
Ted Sarandos, Netflix co-CEO
Regulatory and political scrutiny
Both proposed deals have faced criticism from lawmakers over antitrust concerns and potential industry-wide repercussions. During a congressional hearing earlier this month, Sarandos addressed questions about possible price hikes for consumers and the future of movie theaters under Netflix's ownership.
Paramount's bid has also drawn attention due to the Ellison family's political ties, particularly their connections to the Trump administration, which have raised concerns among Democratic lawmakers.
Market expectations and next steps
Analysts suggest Warner Bros may be leveraging the competition to secure a higher valuation. Luke Stillman, managing director at Madison and Wall, a U.S. media consultancy, predicted the final price could reach $33 per share. Warner Bros indicated it would continue negotiations to determine if Paramount's proposal can be refined into a definitive superior offer.
