Paramount Raises Bid for Warner Bros Discovery to Challenge Netflix Deal

Paramount has increased its offer to acquire Warner Bros Discovery, intensifying competition with Netflix for control of major entertainment properties. The battle involves billions of dollars and popular franchises like Harry Potter and Game of Thrones. Netflix currently has a $27.75 per share deal but faces pressure from Paramount's higher bid.

A major Hollywood bidding battle has escalated as Paramount increased its acquisition offer for Warner Bros Discovery, according to a source with knowledge of the negotiations who spoke to Reuters on Monday. The move aims to disrupt the entertainment company’s existing agreement with Netflix.

The competition centers on valuable entertainment properties, including beloved franchises such as “Harry Potter” and “Game of Thrones,” as companies fight for streaming market control.

Netflix currently holds the preferred position with Warner Bros after proposing to purchase the studio and streaming operations for $27.75 per share in cash, totaling $82.7 billion. However, the streaming giant now has the opportunity to counter Paramount’s enhanced proposal.

With substantial financial resources at its disposal, Netflix could increase its bid for the HBO Max parent company, while Paramount’s competing offer has backing from Oracle billionaire Larry Ellison through his son David Ellison’s leadership.

Paramount’s comprehensive company bid reaches $108.4 billion, equivalent to $30 per share.

Warner Bros requested Paramount submit its “best and final offer” after declining an improved proposal that would have covered the $2.8 billion Netflix termination fee and included a quarterly “ticking fee” of 25 cents per share starting next year to offset any deal completion delays for shareholders.

Warner Bros stated that Paramount’s February 10 proposal remained inadequate for board consideration as a superior alternative, establishing a seven-day February 23 deadline for a revised submission.

MoffettNathanson analysts previously indicated that a Paramount offer around $34 per share would likely conclude the competition and “eliminate continued discussion about Discovery Global’s worth.”

Warner Bros estimates suggest Discovery Global’s value could range from $1.33 to $6.86 per share.

Netflix maintains its proposal provides Warner Bros shareholders additional benefits through the Discovery Global separation, which the company claims will create value by offering enhanced strategic, operational and financial flexibility to the resulting entity.

Conversely, Paramount has characterized the cable division spinoff that forms the core of the streaming company’s offer as having no meaningful value.

Warner Bros, under David Zaslav’s leadership, faced pressure from Ancora Capital after the activist investor acquired approximately $200 million in HBO owner shares and criticized the company for insufficient engagement with Paramount.

The investor issued a warning that rejecting renewed Paramount negotiations would result in opposition to the Netflix agreement and accountability measures against the company’s board during the annual shareholder meeting.