The windy path of a potential Warner Bros. Discovery sale continued this week, with WBD’s board continuing to support an agreement with Netflix but giving hostile suitor Paramount Skydance a limited seven-day window to present a “best and final” offer. Paramount, meanwhile, categorized the board’s actions as “unusual” but said it’s prepared to engage in good faith discussions with WBD.
The most recent developments came Tuesday when WBD disclosed it had set a special meeting date of March 20, 2026 to vote on an existing deal with Netflix that would see the SVOD giant acquired WBD’s studio and streaming businesses, including HBO and HBO Max.
Simultaneously it said that Netflix gave WBD a “limited waiver” greenlight to engage in discussions with Paramount Skydance for a seven-day period (ending February 23) to get clarity for WBD stockholders and give Paramount a chance to make a best and final offer.
After Netflix was initially selected as the winning WBD bidder back in December, Paramount has continued its hostile pursuit to purchase all of WBD – including the global linear networks business that would not be part of Netflix’s proposed transaction. David Ellison-led Paramount has continued to work to sway WBD shareholders even after repeated rejections by WBD’s board, contending its $30 per share all-cash offer is superior value to Netflix’s and provides a clearer, quicker path to regulatory approval and closing.
Ahead of Tuesday’s move by WBD, Paramount further sweetened the offer by promising to fund a $2.8 billion breakup fee that would be owned to Netflix by WBD for terminating their deal and pledging a “ticking fee” that would more cash to WBD shareholders every quarter if a deal with Paramount didn’t close beyond December 31, 2026.
Paramount claimed those commitments surpassed the threshold needed for WBD’s board to engage with the company on the offer, while still intending to solicit proxies against the Netflix deal at the upcoming WBD special shareholder meeting.
WBD acknowledged receipt of the revised offer on February 10, but in Tuesday’s disclosures said that following the amendments, “a senior representative for PSKY informed a WBD Board member that, if the WBD Board authorize discussions, PSKY would agree to pay $31 per share and that the offer was not PSKY's ‘best and final’ proposal.”
Per WBD, that price increase, along with other matters Paramount said it would address were not reflected in its latest merger offer and where WBD is seeking clarity and giving time for Paramount to revise and potentially offer more.
"Throughout the entire process, our sole focus has been on maximizing value and certainty for WBD shareholders," said David Zaslav, president and CEO of WBD in a statement. "Every step of the way, we have provided PSKY with clear direction on the deficiencies in their offers and opportunities to address them. We are engaging with PSKY now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer."
As for Paramount, the company responded Tuesday calling the board’s actions unusual but saying it is “prepared to engage in good faith and constructive discussions.”
In the statement, Paramount said by allowing the 7-day negotiation window, WBD’s board avoided making the determination that Paramount’s offer could reasonably be expected to result in a superior proposal than Netflix’s – which would give Paramount full rights to negotiate without a deadline in place.
And while Paramount said it’s prepared to engage in discussions during the week-long window, it did not yet indicate whether that means upping its own existing $30 per share price tag – noting proxy materials sent to WBD shareholders state the range of Netflix’s own all-cash consideration between $21.23 to $27.75 per WBD share.
“By contrast, Paramount already offers a higher value of $30 per share, all-cash and a more expeditious and certain path to closing a transaction, including with the previously disclosed addition of a $0.25 per-share, per-quarter ticking fee,” stated Paramount.
At the same time, WBD’s board is moving forward with the special shareholder meeting (where Paramount plans to nominate a slate of directors) to vote on the Netflix deal, which it continues to unanimously recommend in favor to shareholders while advising them to reject the Paramount tender offer.
"As announced today, we continue to believe the Netflix merger is in the best interests of WBD shareholders due to the tremendous value it provides, our clear path to achieve regulatory approval and the transaction's protections for shareholders against downside risk,” commented Samuel Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors. “With Netflix, we will create a brighter future for the entertainment industry – providing consumers with more choice, creating and protecting jobs and expanding U.S. production capacity while increasing investments to drive the long-term growth of our industry."