Warner Bros. Discovery says Paramount’s $31 per share bid is ‘superior’ to Netflix offer — latest twist in bidding war

Warner Bros. Discovery’s board has labeled a revamped bid from Paramount Skydance a “superior proposal,” throwing a wrench into its pending merger with Netflix.

The New York-based media giant announced the decision on Thursday, triggering a four-business-day window for Netflix to match the offer or lose the deal

Any new company that emerges from this bidding war would include HBO Max and rival tech giants Amazon and Apple in the increasingly competitive streaming market. REUTERS

David Ellison’s Paramount Skydance has offered $31 per share in cash for WBD, plus a 25-cent quarterly “ticking fee” per share for any delays after Sept. 30.

The offer also includes a $7 billion regulatory breakup fee and covers the $2.8 billion penalty Warner Bros. Discovery would owe Netflix if it bolts.

“We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty, and speed to closing,” Ellison said in a statement.

A takeover target can label an external bid as a “company superior proposal” that’s financially stronger and more viable if it has been vetted by independent advisors.

Netflix’s offer for Warner Bros. Discovery was an all-cash transaction valued at $27.75 per share.

It came after officials on both sides of the Atlantic warned that Netflix could face the ire of anti-trust authorities, prompting CEO Ted Sarandos to lobby Washington and major European capitals that the proposed deal should get the green light.

Warner Bros. Discovery said it has notified Netflix, kicking off the “match period” in which the streaming behemoth can tweak its terms — potentially upping the ante or adding safeguards — to reclaim superiority.

Warner Bros. Discovery, which is led by CEO David Zaslav, labeled a revamped bid from Paramount Skydance a “superior proposal” on Thursday. Getty Images to Warner Bros. Pictures

If Netflix falters, Warner Bros. Discovery could ditch the deal, with Paramount Skydance footing the bill.

Perks offered by Paramount include Ellison’s dad — Oracle founder Larry Ellison, a close ally of President Trump’s — pledging extra equity for lender solvency.

Warner Bros. Discovery, which is led by CEO David Zaslav, said it still views Netflix as its preferred buyer for now.

“The Netflix merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction and has not withdrawn or modified its recommendation,” the company said in a statement.

It is thought that any new company that emerges from the bidding war, which would include HBO Max, would rival tech giants Amazon and Apple in the increasingly competitive streaming market.