Multiple outlets, including Deadline, are reporting that Warner Bros. Discovery could announce as soon as tomorrow its intentions to enter discussions with Paramount Skydance about a potential merger.
Despite agreeing to a deal with Netflix, the Ellison family's latest offer may be too good for the company, which also owns HBO and DC Studios, to ignore.
Paramount's unsolicited takeover offers, all of which have been rejected before now, have caught the eye of many Warner Bros. Discovery investors. They've been vocal about the board considering all options, despite there being a signed deal with Netflix.
As of now, the streaming giant would acquire Warner Bros.' film and television assets for $27.75 per share, all in cash (a revised offer after an initial cash and stock deal). Paramount, meanwhile, is offered $30 per share in cash. The company has also sweetened the pot in a way that emphasises just how much power—and money—the Ellisons hold.
According to the trade, "Its latest bid added a new $0.25-per-share so-called 'ticking fee' payable to WBD shareholders for each quarter its transaction has not closed beyond December 31, 2026, which it said comes to about $650 million in cash value each quarter."
"It also agreed to fund a $2.8 billion termination fee that would be payable to Netflix and ticked off a series of concessions around WBD's debt financing costs and obligations. Paramount still has not defined that bid as its last and best offer."
This could all be a ploy by Warner Bros. Discovery to force Netflix into upping its current bid. Either way, it's clear now that nothing is set in stone, despite what any press releases you read might say.
Variety has added further clarity by explaining that the WBD board is likely pushing Paramount into making its best and final offer. That would allow shareholders "to make a considered choice, and it would allow WBD to push Netflix to match Paramount Skydance terms if they are deemed better than the existing agreement."
Complicating matters is the fact that Netflix's offer is only for Warner Bros. Pictures and HBO/HBO Max. Paramount is hoping to buy the entire company, including cable channels like CNN, TNT, Discovery, HGTV, and Food Network.
Netflix is widely considered the lesser of two evils when it comes to one of the biggest corporate mergers in Hollywood history, but this is clearly a developing situation. Stay tuned for updates as we have them.