Warner Bros. Discovery on Tuesday he said he will reopen talks on a deal with supreme skydance under a seven-day exemption from netflix to explore “deficiencies” in Paramount's offer to buy out 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 provided WBD with 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 seek clarity for WBD shareholders and provide PSKY the ability to make its best and final offer,” Warner Bros. Discovery said in a statement.
“During this period, WBD will engage with PSKY to discuss the deficiencies that remain unresolved and clarify certain terms of PSKY's proposed merger agreement,” it said.
Paramount leadership has repeatedly said its $30 per share, all-cash offer is not the “best and final.” Last week, the company sweetened its offer with additional “improvements” but stopped short of increasing the per-share value.
Warner Bros. Discovery said Tuesday that a senior Paramount representative informed a WBD board member that it would pay $31 per share if talks on the deal were reopened.
“Throughout the entire process, our sole objective has been to maximize value and certainty for WBD shareholders,” WBD CEO David Zaslav said in a statement. “Every step of the way, we have provided PSKY with clear direction on the deficiencies in their offers and opportunities to address them. We are now engaging with PSKY to determine whether they can deliver a viable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer.”
After the limited exemption period, Netflix will retain its equivalent rights provided by the merger agreement, WBD said.
Netflix co-CEO Ted Sarandos told CNBC's Julia Boorstin on Tuesday that the exemption was granted to provide clarity to shareholders.
“Paramount had been making a lot of noise, flooding the area with confusion for shareholders… including floating all these hypothetical offers and talking directly to shareholders and bypassing the Warner Bros. Discovery board,” Sarandos said. “So we've given them the opportunity to give those shareholders exactly what they deserve, which is complete clarity and certainty.”
When asked about Netflix matching rights, Sarandos declined to comment on the extent to which the company would push its own offer, which currently stands at $27.75 per share, all in cash for the streaming and studio assets.
“I don't want to get into hypotheses,” he said. “Let them make a move and then we'll see where the next step takes us.”
In a statement Tuesday, Paramount acknowledged WBD's earlier announcement and noted that it still believed its offer was superior to Netflix's proposed deal.
“Although the Board's actions are unusual, Paramount is willing to engage in good faith and constructive discussions,” Paramount said.
Still, Paramount said it will move forward with its takeover bid, as well as its intention to nominate directors to WBD's board of directors during its annual meeting.
WBD also announced Tuesday that a special shareholder meeting will be held on March 20 and said its board continues to unanimously recommend Netflix's deal over Paramount's bid.
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 current distraction to WBD shareholders and the broader entertainment industry caused by PSKY's antics,” Netflix said. “Accordingly, we granted WBD a limited seven-day waiver of certain obligations under our merger agreement to allow them to collaborate with PSKY to fully and finally resolve this matter.”
Shares of Warner Bros. Discovery gained nearly 3% on Tuesday. Paramount shares gained about 5%.
Raising regulatory concerns
Any of Warner Bros. Discovery's asset purchase proposals raise regulatory issues.
Media industry experts and lawmakers have questioned whether Netflix's proposed deal would win approval, as it would bring together two major streaming services and could result in higher prices for consumers.
Netflix leaders have repeatedly said the company believes it would win regulatory approval for the deal because it would preserve jobs in a challenged media landscape plagued by layoffs.
However, Paramount has sounded the alarm to WBD shareholders, arguing that its offer is not only better but would more easily win government support.
On the other hand, Paramount's bid has raised questions of foreign financing and antitrust considerations by uniting two large pay-TV channel portfolios and two major movie studios.
The Paramount deal is financed in part by Saudi Arabia's sovereign wealth funds; Abu Dhabi, United Arab Emirates; and Qatar. Paramount has said those entities agreed to waive any governance rights.
In its statement on Tuesday, Netflix criticized foreign financing, which it said it expects to come under scrutiny 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 on antitrust enforcement, regulatory battles over either deal are likely to be won or lost in that market. Of course, the question still arises of how President Donald Trump will view either transaction. Trump recently said he had not been involved in the process so far and did not plan to do so, although he reportedly met with executives from each side.
“PSKY does not have a faster regulatory path,” Sarandos told CNBC on Tuesday. “I don't know why the Ellisons would imply that they have inside information about the Department of Justice, but I can assure you that they don't. And in terms of our regulatory policy [position] In Europe and around the world we are known and trusted entities among all actors in Europe.”
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 improved approval prospects, a clearer national security picture and financial security.”
