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Are you still watching? Because the Netflix/WBD/Paramount saga has reached its next episode.
On Thursday, Warner Bros. Discovery announced that Paramount Skydance’s updated merger proposal of $31 per WBD share is a “Company Superior Proposal.” Netflix, which previously entered into an agreement with WBD, now has four business days to match.
WBD says its board of directors consulted independent financial and legal advisors for the decision. Among the highlights, Paramount’s offer includes the $31 purchase price in cash, a daily ticking fee of $0.25 per share per quarter (effective after Sept. 30, 2026), and a $7 billion termination fee payable by Paramount if the deal doesn’t go through regulatory approval. Plus, Paramount is on the hook for the $2.8 billion termination fee that WBD would be required to pay to Netflix to terminate the existing Netflix merger agreement.
During an earnings call on Thursday, WBD CEO David Zaslav said that any deal the company makes would focus on maximizing value and minimizing downside risk. He added that the company’s board is continuing to lead a “rigorously highly competitive” sales process.
WBD notified Netflix of its decision, giving the company four days to match, per their agreement. Netflix’s bid was revised in January to an all-cash offer of $72 billion, or $27.75 per WBD share.
But will the streamer actually want to continue pursuing WBD? Questions remain, according to Emarketer senior analyst Ross Benes.
“Netflix and Paramount stocks have taken a hit since this bidding war started. Investors will not be keen on increasing bids further. If Netflix pulled out of the WBD sweepstakes, it’d leave rival Paramount to swallow a bigger tab than it originally planned,” Benes said.
However, there may be more at play than just business interests.
“Netflix executives have always spoken of HBO fondly, hoping to become HBO before HBO became Netflix,” Benes added. “There’s a sentimental angle to this deal in Netflix being able to own HBO themselves. We’ll soon learn how far Netflix is willing to go to make that fantasy reality.”
