Discovery of Warner Bros. announced on Tuesday that it would reopen negotiations with Paramount Skydance under a seven-day waiver of Netflix to explore the “loopholes” in Paramount’s offer to purchase all of WBD.
The former media company has a pending transaction with Netflix for its streaming and studio businesses. Paramount launched a hostile takeover bid directly to WBD shareholders at $30 per share after losing to Netflix in a bidding war.
“Netflix has granted WBD a limited waiver under the terms of WBD’s merger agreement with Netflix, allowing WBD to engage in discussions with Paramount Skydance (“PSKY”) (NASDAQ: PSKY) for a seven-day period ending February 23, 2026 to obtain clarification for WBD shareholders and to provide PSKY the opportunity to make its best and final offer,” Warner Bros. said. Discovery in a press release.
“During this period, WBD will engage with PSKY to discuss gaps that remain unresolved and clarify certain terms of PSKY’s proposed merger agreement,” it said.
Paramount management has repeatedly stated that its $30 per share, all-cash offer was not the “best and final.” Last week, the company sweetened its offer with additional “improvements” but failed to increase the per share value.
Warner Bros. Discovery said Tuesday that a top Paramount representative had informed a WBD board member that it would pay $31 per share if negotiations were to reopen.
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After the limited waiver period, Netflix will retain its corresponding rights under the merger agreement, WBD said.
“Throughout the process, our sole focus has been on maximizing value and certainty for WBD shareholders,” David Zaslav, CEO of WBD, said in a statement. “At every stage, we have provided PSKY with clear instructions on the gaps in their offerings and the opportunities to address them. We are now engaging with PSKY to determine whether they can present a concrete, binding proposal that provides greater value and certainty to WBD shareholders through their best and final offer.
Paramount, in a statement released Tuesday, acknowledged WBD’s earlier announcement, noting that it still believed its offer was superior to the deal offered by Netflix.
“Although the Board’s actions are unusual, Paramount is nonetheless prepared to engage in good faith and constructive discussions,” Paramount said.
Paramount nevertheless said it would continue with its takeover bid as well as its intention to appoint directors to WBD’s board of directors at its annual meeting.
WBD also announced Tuesday that a special shareholder meeting would be held on March 20 and said its board continues to unanimously recommend the Netflix deal over Paramount’s offer.
Netflix said in a statement that the shareholder meeting date marked an “important milestone for our transaction with WBD.”
“While we are confident that our transaction provides superior value and certainty, we recognize the continued distraction to WBD shareholders and the entertainment industry as a whole caused by PSKY’s antics,” Netflix said. “Accordingly, we have granted WBD a limited seven-day waiver of certain obligations under our merger agreement to enable them to engage with PSKY to fully and finally resolve this matter.”
Warner Bros. shares Discovery rose about 3.5% on Tuesday. Paramount shares rose about 6%.
Raising Regulatory Concerns
Either plan to purchase Warner Bros. assets Discovery comes with regulatory questions.
Media industry players and lawmakers are questioning whether Netflix’s proposed deal would be approved because it would bring together two of the major streaming services and could result in higher prices for consumers.
Netflix executives have repeatedly said the company believes it will win regulatory approval for the deal because it would preserve jobs in a media landscape plagued by widespread layoffs.
Paramount, however, has sounded the alarm to WBD shareholders and says its offer is not only better, but would more easily obtain government support.
On the other hand, Paramount’s bid raised questions of foreign financing and antitrust considerations by bringing together two major pay-TV portfolios and two major movie studios.
Paramount’s deal is financed in part by Saudi Arabian sovereign wealth funds; Abu Dhabi, United Arab Emirates; and Qatar. Paramount said these entities agreed to waive any governance rights.
In its Tuesday statement, Netflix denounced the foreign financing, which should be subject to review by international regulators, including the Committee on Foreign Investment in the United States (CFIUS). Netflix said it also expects European authorities to “scrutinize Middle Eastern investors in the PSKY consortium and be skeptical of claims that they are purely passive investors.”
Given Europe’s track record in antitrust enforcement, it’s possible that regulatory battles for either deal will be won or lost in this market. Of course, the question still remains how President Donald Trump will view either deal. Trump recently said he has not been involved in the process so far and has no plans to do so, although he has apparently met with leaders from each camp.
Netflix’s statement Tuesday “unsurprisingly points to a number of arguments Netflix believes it has in its favor,” according to a Raymond James analyst note Tuesday, “including better approval prospects, a clearer picture of national security and financial security.”