Warner Bros. Discovery Considers Restarting Talks With Paramount Skydance After Revised Proposal

Warner Bros. Discovery Inc. is weighing whether to reopen talks with suitor Paramount Skydance Corp. after receiving a revised proposal, a move that could revive a high-stakes bidding contest for one of Hollywood’s largest media companies, people familiar with the matter tell Bloomberg.

Warner Bros. board members are discussing whether Paramount’s amended offer could deliver a superior outcome for shareholders or pressure Netflix Inc. to improve its own bid, the people said. The board has not made a decision and could still proceed with its existing agreement with Netflix, the people said, speaking on condition of anonymity.

Warner Bros. did not comment Sunday on the new report. The company acknowledged last week that it had received an updated, unsolicited tender offer.

Paramount submitted the updated terms last week aimed at addressing several concerns previously raised by Warner Bros. Under the proposal, Paramount would pay a $2.8 billion termination fee owed to Netflix if Warner Bros. were to exit its current agreement.

Paramount also offered to backstop a refinancing of Warner Bros.’ debt and pledged to compensate shareholders if the transaction fails to close by Dec. 31, signaling confidence that regulators would approve the deal quickly.

Warner Bros. executives have previously outlined reservations about Paramount’s bid, but this is the first time the board has indicated the revised terms could justify renewed engagement or force Netflix to sweeten its offer.

Warner Bros. has agreed to sell its namesake studio and the HBO Max streaming business to Netflix Inc. in a deal valuing the company at $27.75 per share. The company has been moving to hold a shareholder vote on that transaction while Paramount, owner of CBS and MTV, has pursued a parallel strategy, appealing directly to shareholders with a $30-per-share tender offer and lobbying regulators to support it.

Both Paramount Skydance Corp. and Netflix have indicated a willingness to raise their bids to secure Warner Bros. Paramount Chief Executive Officer David Ellison has said the current proposal is not his final offer, while Netflix executives have told investors they could go higher.

At the same time, both bidders face investor pressure to avoid overpaying. Netflix shares have fallen more than 40% from their June peak amid concerns about the cost and risks of the Warner Bros. transaction.

If Warner Bros. chooses to re-engage with Paramount, it must notify Netflix, which would retain the right to match any superior proposal. Paramount first triggered the auction with an unsolicited bid last year but ultimately lost out to Netflix.

Some shareholders, including Pentwater Capital Management and Ancora Holdings Group, have urged the board to engage with Paramount, though fewer than 2% of outstanding shares have been tendered so far.

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