Warner Bros. rejects Paramount’s 'revised offer,' sets new deadline for 'best final' bid

The Warner Bros-Paramount-Netflix trio has taken a new turn right before finalizing the deal.

Warner Bros Discovery on Tuesday, February 2026, rejected Paramount Skydance's latest $30-a-share hostile bid but gave the Hollywood studio seven days to come up with a "best and final" offer for the owner of HBO Max and the "Harry Potter" franchise.

Paramount informally broached an even higher per-share price of $31, Warner Bros. said, apparently enticing the board to the table.

But its response to Paramount indicates Warner Bros. prefers its deal with Netflix, and the odds of a switch are long.

Warner Bros. said Paramount has time until February 23 to make a new offer, which Netflix is allowed to match under the terms of the merger agreement.

"Our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger," Warner Bros Chairman Samuel DiPiazza Jr. and CEO David Zaslav said in a letter sent to the Paramount board on Tuesday.

"We continue to recommend and remain fully committed to our transaction with Netflix."

Netflix-Paramount rivalry:

The two media giants have been vying for control of Warner Bros., its flagship film and TV studios, and its deep content library in a contest that highlights the high stakes of a rapidly shifting entertainment landscape.

Warner Bros. said in its letter it expects a bid above $31 per share, more so because a Paramount financial adviser had orally informed them if Warner Bros. reopens deal talks, Paramount would agree to this price, which is not its best offer.

"Time is running out for Paramount with this saga wrangling on for way too long, which is in no one's interest," PP Foresight analyst Paolo Pescatore said. "For now, the ball is in Paramount's court."

Shares of Paramount rose 6%, while Warner Bros. Discovery was up 2.3%. Netflix shares were down 1.4%.

Paramount's current offer for the whole company comes to $108.4 billion, while Netflix is offering $27.75 a share, or $82.7 billion, just for its studio and streaming businesses.

Shareholders vote on Netflix deal set for March 20, 2026:

WarnerBros., which has previously rejected Paramount's offers to buy the entire company, is moving forward with a vote on Netflix's bid on March 20.

The merger, if approved, would take place after Warner Bros spins off its Discovery Global cable operations, which include CNN, TLC, Food Network, and HGTV, into a separate, publicly traded company.

Discovery Global could fetch between $1.33 per share and $6.86 a share, according to Warner Bros. estimates.

Warner Bros' decision to engage with Paramount marks a shift for the studio.

Paramount has said the board "never meaningfully engaged" with them on six different offers that executives made in the 12 weeks before Warner Bros announced the merger agreement with Netflix on December 5.

A hostile bid that Paramount launched days later was rejected later that month.

Activist pressure intensifies:

Paramount's revised offer, which included a personal guarantee on $40 billion in equity from Oracle founder Larry Ellison, father to Paramount CEO David Ellison, was turned down in early January.

To start talks with Paramount, Warner Bros.' board secured a special waiver from Netflix. Under their agreement, Warner Bros can engage with a rival bidder only if the board believes the offer could be superior, triggering a legal loophole that allows limited negotiations despite restrictions on talks.

Netflix issued a statement saying the deal has reached a milestone, with Warner Bros shareholders set to vote next month on the merger.

"While we are confident that our transaction provides superior value and certainty, we recognize the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY’s antics," Netflix said.

Financing concerns clouds Paramount's proposal:

Last week, Paramount offered WBD's shareholders extra cash for each quarter the deal fails to close after this year and agreed to cover the $2.8 billion breakup fee the HBO owner would owe Netflix if it walked away.

Warner Bros. said the amended merger agreement with Paramount still falls short of what its board would consider a superior proposal.

The Warner board wrote, "The Paramount offer still leaves key issues unresolved, including who would cover a potential $1.5 billion junior lien financing fee, what happens if debt financing falls through, and whether equity funding, backed by lead sponsor Larry Ellison, is fully certain."

Paramount and Netflix have said they were engaging with competition authorities across the world, including the U.S. Department of Justice.

The deal is also expected to face tough regulatory scrutiny on concerns over price increases for consumers and potential harm for creatives.

The new chart shows Netflix and Paramount price declines as they pursue WBD's acquisition.