warner bros discovery On Tuesday, it announced it would resume negotiations on a deal with the United States. paramount skydance with a 7-day exemption from Netflix The purpose is to find “flaws” in Paramount’s proposal to acquire all of WBD.
The traditional media company has a pending deal with Netflix for its streaming and studio business. After losing to Netflix in a bidding war, Paramount launched a hostile tender offer to WBD shareholders for $30 per share.
Warner Bros. Discovery said: “Under the terms of WBD’s merger agreement with Netflix, Netflix has granted WBD permission to participate in discussions with Paramount Skydance (“PSKY”) (NASDAQ:PSKY) for seven days, ending February 23, 2026, to provide clarity to WBD stockholders and provide PSKY with the ability to make its best and final offer. in release.
“During this period, WBD will work with PSKY to discuss outstanding deficiencies and clarify certain terms of PSKY’s proposed merger agreement.”
Paramount management has repeatedly stated that the $30-per-share, all-cash offer is not the “best and final.” Last week, the company softened its offer with additional “enhancements” but failed to increase per-share value.
Warner Bros. Discovery announced Tuesday that senior Paramount representatives have notified WBD board members that the company will pay $31 per share if deal negotiations resume.
“Throughout the process, we have been focused solely on maximizing value and certainty for WBD shareholders,” WBD CEO David Zaslav said in a statement. “At every step, we have provided PSKY with clear instructions regarding the flaws in the proposal and opportunities to address them. We are currently in discussions with PSKY to determine whether PSKY can provide a viable and binding proposal that will provide superior value and certainty to WBD shareholders through the best and final proposal.”
According to WBD, even after the limited waiver period, Netflix will retain matching rights as provided in the merger agreement.
Netflix co-CEO Ted Sarandos told CNBC’s Julia Boorstin on Tuesday that the waiver was granted to provide clarity to shareholders.
“Paramount was making a tremendous amount of noise and creating a lot of confusion and confusion for shareholders…including announcing all these hypothetical offers, talking directly to shareholders, and bypassing the Warner Bros. Discovery board,” Sarandos said. “So we have given these shareholders the opportunity to get exactly what they deserve: complete clarity and certainty.”
Asked about Netflix’s matching rights, Sarandos declined to comment on how high the company might raise its offer. The current offer is $27.75 per share on an all-cash basis for streaming and studio assets.
“I don’t want to get into hypotheticals,” he said. “Let them take action, and we’ll see where the next step takes us.”
paramount in a statement On Tuesday, it acknowledged WBD’s earlier announcement and said it still believes its proposal is better than the proposed deal with Netflix.
“While the board’s actions are unusual, Paramount remains prepared to engage in constructive discussions in good faith,” Paramount said in a statement.
Nevertheless, Paramount announced its intention to proceed with the tender offer and nominate directors to WBD’s board of directors during the annual meeting.
WBD also announced Tuesday that it will hold a special general meeting of shareholders on March 20, saying its board continues to unanimously recommend a deal with Netflix over Paramount’s offer.
Netflix said in a statement The day of the general meeting marked an “important milestone for the transaction with WBD”.
“While we believe our transaction provides superior value and certainty, we recognize that PSKY’s antics continue to disrupt WBD shareholders and the broader entertainment industry,” Netflix said in a statement. “Accordingly, we have granted WBD a limited seven-day waiver of certain obligations under the Merger Agreement to allow us to work with PSKY to fully and conclusively resolve this matter.”
Shares of Warner Bros. Discovery rose about 3% on Tuesday. Paramount stock rose about 5%.
Growing regulatory concerns
Any offer to purchase Warner Bros. Discovery assets It also involves regulatory questions.
Media industry insiders and lawmakers have questioned whether Netflix’s proposed partnership would pass, as it would combine two major streaming services and could result in higher prices for consumers.
Netflix executives have repeatedly said they believe the company can win regulatory approval for the deal because it will preserve jobs in a difficult media environment rife with layoffs.
But Paramount is sounding the alarm on WBD shareholders, insisting that its proposal is not only better, but also more likely to win government support.
Meanwhile, Paramount’s proposal has raised questions about foreign funding and antitrust considerations in merging two large portfolios of pay-TV channels and major movie studios.
Paramount’s deal is partially funded by Saudi Arabia’s sovereign wealth fund. Abu Dhabi, United Arab Emirates. And Qatar. Paramount believes that these companies agreed to relinquish any control.
among them statement Netflix on Tuesday denounced foreign funding and said it expected to face scrutiny from international regulators, including the Committee on Foreign Investment in the United States (CFIUS). Netflix also said it expected European authorities to “scrutinize the Middle East investors in PSKY’s consortium and be skeptical of claims that they are purely passive investors.”
Given Europe’s antitrust enforcement record, the regulatory fight over either deal could be won or lost in that market. Of course, the question remains how President Donald Trump will view either deal. President Trump recently said he has not been involved in the process and has no plans to do so, but he has reportedly met with senior officials from each campaign.
“There is no faster regulatory path for PSKY,” Sarandos told CNBC on Tuesday. “I don’t know why the Ellisons implied that they had inside information at the Department of Justice, but I can tell you that they don’t. And when it comes to our regulations, [position] In Europe and around the world, we are known and trusted by all European players. ”
Netflix’s statement on Tuesday “understandably points to a number of arguments that Netflix believes are in its favor,” including “improved approval prospects, a clearer national security picture, financial security, and more,” according to an analyst note from Raymond James on Tuesday.