Hollywood on Edge: Another Round in the Battle for Warner Bros.

In recent days, developments surrounding Warner Bros. Discovery have clearly accelerated. The board has decided to reopen discussions with Paramount after obtaining a temporary waiver from Netflix allowing limited negotiations. At the same time, it formally rejected Paramount’s previously revised proposal and set a deadline of February 23 for the submission of a final and best offer. Despite allowing for this possibility, the company’s leadership continues to recommend that shareholders accept Netflix’s proposal, arguing that it offers greater predictability and a higher likelihood of closing.

Paramount has signaled its willingness to raise its bid to around $31 per share, up from the earlier $30, implying a total equity valuation exceeding $108 billion including debt. The proposal covers Warner Bros. Discovery’s full portfolio of assets, including its television and news segments, and incorporates elements designed to enhance its financial appeal. These include a quarterly compensation mechanism for shareholders in the event of a delayed closing, as well as a commitment to cover the estimated $2.8 billion termination fee payable to Netflix. On a nominal basis, Paramount’s proposal therefore appears more attractive.

Netflix’s offer, however, has a different structure and risk profile. It primarily targets the studio operations and streaming segment, at approximately $27.75 per share and a total transaction value of roughly $82–83 billion. Although the per-share price is lower, the largely cash-based structure and previously agreed terms enhance the transparency and clarity of the process. According to Warner Bros. Discovery’s board, this translates into greater certainty of completion. Regulatory considerations are also significant, as a full takeover by Paramount could require a more complex antitrust review, whereas Netflix’s narrower transaction scope may entail a lower risk of regulatory intervention.

From a market perspective, this situation implies continued uncertainty and elevated volatility. In the short term, investors are factoring in the possibility of a bid formally recognized as superior to the currently recommended transaction. Any indication of improved terms from Paramount could support Warner Bros. Discovery’s share price while increasing pressure on Netflix, which retains the right to match or revise its offer. This dynamic creates the conditions for a potential bidding contest in which shareholder value could increase, albeit alongside higher risk and price fluctuations.

In the medium term, three factors will be decisive: the final level and structure of Paramount’s offer, the board’s assessment of its superiority relative to the existing agreement, and the stance of regulatory authorities. If Paramount fails to present a clearly more attractive and fully credible proposal, the market may revert to the base case scenario centered on the completion of the Netflix transaction. Conversely, the emergence of a materially higher and fully financed offer could prompt a change in the board’s recommendation and trigger another round of negotiations.

More broadly, the current situation illustrates the classic tension between maximizing price and minimizing execution risk. Some investors may focus on the higher valuation implied by Paramount’s bid, while others may prioritize the stability and predictability of the Netflix transaction. Until a final resolution is reached and shareholders vote on March 20, 2026, elevated volatility and strong market reactions to any new developments in the negotiations should be expected.