The corporate future of Warner Bros. Discovery (WBD) hangs in the balance as two distinct acquisition proposals compete for shareholder approval. The media giant finds itself back in active negotiations, having secured a limited waiver that permits renewed talks with Paramount Skydance, even as a separate agreement with Netflix moves toward a vote.
A Tight Deadline for a Final Bid
In a significant development this week, WBD’s board granted Paramount Skydance a narrow window to submit its definitive proposal. The suitor has until February 23, 2026, to present its “best and final” takeover offer. This move was prompted by an informal indication from Paramount that it is willing to increase its all-cash bid to at least $31.00 per share.
This follows a prior hostile offer from Paramount Skydance valuing the shares at $30.00 each, which implied an enterprise value, including debt, of approximately $108.4 billion. Warner Bros. Discovery initially rejected that proposal, favoring a competing arrangement with Netflix. The potential for a higher price has compelled the board to re-evaluate, though Paramount’s revised terms have not yet been formally classified as a “superior proposal.”
The Netflix Agreement Remains the Board’s Choice
Despite the reopened discussions, WBD’s leadership continues to recommend the existing deal with Netflix to its shareholders. That transaction values the equity at $27.75 per share, equating to an enterprise value of roughly $82.7 billion. The structure, however, is markedly different: Netflix is primarily interested in acquiring Warner Bros. Studios and the HBO Max streaming business, while the linear TV networks would be spun off.
A pivotal special shareholder meeting scheduled for March 20, 2026 will determine the fate of the Netflix transaction. Netflix provided the waiver allowing the current seven-day negotiation period but retains matching rights. Should a formally superior offer materialize, Netflix reserves the option to match its terms.
Should investors sell immediately? Or is it worth buying Warner Bros. Discovery (A)?
Paramount’s Sweetened Deal and Inherent Complexities
The fundamental conflict lies in the strategic vision of each bidder. Paramount Skydance is pursuing a full-company acquisition, whereas Netflix aims for a vertical integration of studio and streaming assets. To make its proposal more attractive, Paramount has incorporated additional financial incentives:
- Breakup Fee Coverage: Paramount would cover the potential $2.8 billion termination fee WBD might owe Netflix for switching partners.
- Ticking Fee: A provision of $0.25 per share per quarter would be activated if the deal’s closing is delayed beyond December 31, 2026.
Market observers caution that the higher headline price does not automatically translate to a more secure outcome. Significant questions regarding deal financing—expected to involve substantial debt alongside backing from the Ellison family and sovereign wealth funds—and potential regulatory obstacles related to market concentration are under discussion.
In early trading following the news of resumed talks, WBD shares showed minimal movement, dipping slightly to €24.23 (down 0.55%).
The timeline is now clear: Paramount Skydance must table its final offer by February 23, 2026. Subsequently, on March 20, 2026, shareholders will vote on the Netflix deal. That date will ultimately reveal whether WBD proceeds with the Netflix structure or if a higher cash price, augmented by supplementary payments, proves decisive.
Ad
Warner Bros. Discovery (A) Stock: Buy or Sell?! New Warner Bros. Discovery (A) Analysis from February 19 delivers the answer:
The latest Warner Bros. Discovery (A) figures speak for themselves: Urgent action needed for Warner Bros. Discovery (A) investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 19.
Warner Bros. Discovery (A): Buy or sell? Read more here...
