Paramount Offers High Price Again to Bid for Warner Bros., Netflix Acquisition Hits Twists and Turns.

TradingKey - Hollywood Media Warner Bros. (WBD) announced on Tuesday that it has received Paramount (PSKY) a revised acquisition proposal in which the offer was raised from the previous $30 per share to $31 in cash. The board stated that this new offer "is expected to constitute a superior proposal to the current Netflix agreement" and noted that both parties are continuing consultations. Currently, Netflix (NFLX) deal remains in effect, and the Warner Bros. board has not yet formally designated the Paramount proposal as the final preferred option.

As of Tuesday's close, Warner Bros. Discovery shares rose slightly but fluctuated in some after-hours markets; Netflix shares rebounded, while Paramount-related securities underwent some adjustments, reflecting the market's re-pricing of the uncertainty surrounding the acquisition path.

In the latest revised proposal, Paramount not only increased the offer by $1 per share but also added a condition for a deferred compensation of $0.25 per share if the deal is not completed by September 30, 2026. Furthermore, if the deal fails due to regulatory reasons, Paramount is willing to pay a regulatory termination fee of up to $7 billion, which is equivalent to its annual revenue.

Previously, Netflix had only committed to paying Warner Bros. a "staggering breakup fee" of nearly $5.8 billion if the acquisition were terminated for regulatory reasons.

It is worth noting that despite continuous plunges, Netflix's market capitalization remains near $330 billion, while Paramount's is less than $12 billion. If the deal cannot be completed due to regulatory reasons, this expenditure would undoubtedly be devastating for Paramount.

Additionally, the proposal promises to cover approximately $2.8 billion in termination fees that WBD would have to pay for canceling the Netflix agreement and includes necessary financing support arrangements.

This new offer is significantly more attractive in terms of direct cash consideration compared to Netflix's existing offer of $27.75 per share. Netflix's proposal primarily focuses on acquiring Warner Bros. Discovery's core streaming and film assets, including film and television production, HBO, and HBO Max, whereas Paramount's current bid is for an all-asset acquisition of the entire WBD enterprise.

Based on previously disclosed valuations including debt, Paramount's original $30 offer corresponded to an enterprise value of approximately $108 billion, while the overall valuation of the Netflix deal was about $82.7 billion.

The WBD board stated in a declaration that it is still conducting an in-depth evaluation of the new proposal with Paramount, while continuing to recommend the Netflix deal to shareholders, without withdrawing or modifying its original recommendation. The board also noted that if it ultimately determines Paramount's offer does indeed constitute a "superior proposal," Netflix will be granted four business days to propose amendments to its agreement.

For WBD shareholders, the $31 all-cash offer nominally increases the merger consideration. This bid, higher than the cash component of the existing agreement, provides shareholders with a direct and tangible return anchor.

Reviewing the entire bidding process, the competition between the two parties has been underway since December 2025. Netflix's initial $27.75 per share agreement gained support from the board early on, followed by Paramount's $30 per share all-cash hostile takeover bid, aimed at winning shareholder support directly.

However, that proposal was not directly adopted due to board concerns regarding financing certainty and regulatory risks. Netflix subsequently agreed to a limited waiver period to allow WBD to discuss Paramount's new proposal. Paramount continued to adjust its terms, ultimately raising the offer to $31 per share and significantly strengthening the provisions in an attempt to narrow the gap in expectations between the two bidders.

Currently, the Warner Bros. Discovery board has yet to make a final decision. If it ultimately determines that the Paramount proposal is superior to the existing Netflix agreement, it will trigger a response window for Netflix, potentially sparking a second round of bidding escalation. Conversely, the board may continue to support the Netflix agreement and proceed with the originally planned asset transfer.

Regardless of the final outcome, this event has become a significant milestone in the recent capital struggle within the Hollywood media industry, directly influencing the industry's re-pricing of media asset valuations, regulatory risk premiums, and M&A strategies.