Warner Bros rejects Paramount bid, seeks improved offer as Netflix merger vote nears – Firstpost

Warner Bros Discovery (WBD) has rejected Paramount Skydance’s revised $30-per-share offer but invited the company to submit a “best and final” bid within seven days, even as it reaffirmed its commitment to a previously agreed merger with Netflix.

In a letter to Paramount’s board, WBD Chairman Samuel DiPiazza Jr. and CEO David Zaslav said the current proposal was not “reasonably likely” to be superior to the Netflix transaction. Paramount now has until February 23 to present an improved, binding offer.

The development sets up a decisive week in a high-stakes battle for control of Warner Bros’ film studios, television assets, and extensive content library.

Competing proposals

Netflix has agreed to acquire Warner Bros. studio and streaming businesses, including HBO Max and key franchises such as Harry Potter, at $27.75 per share, valuing the deal at about $82.7 billion. Under the structure of the agreement, WBD plans to spin off its Discovery Global cable networks into a separate publicly traded company before the merger closes.

Paramount Skydance, by contrast, has offered $30 per share and has informally indicated it could go to $31, in a proposal valuing the entire company at roughly $108.4 billion, including cable networks. Paramount has also offered to cover the $2.8 billion breakup fee WBD would owe Netflix and to provide additional payments to shareholders if the deal is delayed.

Despite the higher headline valuation, Warner’s board has raised concerns over Paramount’s financing structure and certainty of execution.

Financing and execution risks

WBD flagged unresolved issues in Paramount’s proposal, including responsibility for a potential $1.5 billion junior lien financing fee, backup plans if debt financing falls through, and whether additional equity commitments reportedly backed by investor Larry Ellison are fully binding.

While Paramount has dismissed these concerns, WBD has stressed that any superior proposal must offer not just a higher price but also greater certainty of closing.

Activist and shareholder pressure

The bidding war has intensified amid pressure from activist investors. Ancora Holdings has built a stake in WBD and plans to oppose the Netflix merger. Pentwater Capital Management, which owns about 50 million shares, has backed Paramount’s offer. Other investors have urged both bidders to improve terms.
Shares of WBD have risen as investors anticipate either a sweeter bid or improved deal economics.

Shareholder vote and regulatory scrutiny

Warner Bros. is proceeding with a March 20 shareholder vote on the Netflix merger. Under the agreement, Netflix retains the right to match any improved offer from Paramount.

Both potential transactions are expected to face significant regulatory review. A Netflix–WBD merger could raise antitrust concerns in streaming, while a Paramount–WBD combination would create a broader studio and broadcast consolidation likely to draw scrutiny from US and global competition authorities.

With the February 23 deadline approaching, Paramount must decide whether to raise its offer and address financing concerns. The outcome will shape not only Warner Bros’ future but also the competitive landscape of the global entertainment industry.