Warner Bros. Discovery’s board has determined that David Ellison’s latest revised offer for the entire company could “reasonably be expected” to lead to a “superior proposal.”
Ellison’s 10th bid is valued at $31 per share in cash, plus a daily ticking fee equal to 25 cents per quarter beginning after Sept. 30, 2026. Paramount will pay a $7 billion termination fee to WBD in the event the transaction does not close due to regulatory matters. It will also cover a $2.8 billion termination fee that WBD would be required to pay to Netflix.
Additionally, the proposal includes an obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by Paramount’s lending banks and a “material adverse affect” definition that excludes the performance of WBD’s Global Linear Networks business.
WBD’s board has not determined whether the revised Paramount bid is superior to its $83 billion deal with Netflix. It will continue to engage with Paramount to determine if it can reach a proposal that is superior.
In the event that it does, Netflix will have four business days to match Paramount’s offer and negotiate with WBD to propose any revisions to its current deal. The streamer is currently offering $27.75 per share for WBD’s studio and streaming assets, plus additional “stub equity” from the pending spinoff of Warner’s cable networks into Discovery Global.
There can be no assurance that the board will conclude that the transaction proposed by Paramount is superior to the merger with Netflix or that any definitive agreement or transaction will result from WBD’s discussions with Paramount. The Netflix deal remains in effect and the board is not withdrawing or modifying its recommendation.
A spokesperson for Netflix declined to comment. Representatives for Paramount did not immediately return TheWrap’s request for comment.
The latest update comes after WBD reopened talks with Paramount CEO David Ellison seven days to submit a “best and final” offer following weeks of hostility between the two companies.
Paramount launched a $108.4 billion hostile takeover bid taken directly to shareholders after it was rejected by WBD’s board multiple times. As of Feb. 9, 42.3 million of WBD’s total $2.48 billion outstanding shares had been validly tendered to Paramount, though shareholders can withdraw their shares at any time before the offer’s deadline.
Ellison also sued Warner Bros. in January in an effort to extract more details about how the Netflix deal and Discovery Global spinoff were valued and launched a proxy fight in an attempt to sway shareholders to block the Netflix deal and require a vote to complete the Discovery Global spinoff, which is already on track for later this year. Paramount also said it planned to nominate its own director candidates to WBD’s board at the company’s annual meeting.
The new development marks a shift in momentum towards the Ellisons as Netflix’s bid faced increased regulatory and political pressure over the weekend, as President Trump called on Netflix to fire board member and former UN ambassador Susan Rice or “pay the consequences.”
Trump’s call over the weekend came after Rice said corporations who “bent the knee” to the administration would face consequences when Democrats return to power.
In an interview with the BBC on Monday, Netflix co-CEO Ted Sarandos brushed off concerns about Rice, saying Trump “likes to do a lot of things on social media” and that approval of the deal will be decided by regulators, not the White House.
“This is a business deal. It’s not a political deal,” Sarandos added.
The Department of Justice has also issued a civil investigative demand (CID) to theater owners, filmmakers and producers amid its antitrust review of the Netflix deal.
Netflix has repeatedly maintained that it has “not been given any notice or seen any other sign that the DOJ is conducting a monopolization investigation.” It also said that any claim that it is a monopolist, or seeking to monopolize, is “unfounded.”
“Our success stems from innovation and investment that benefit consumers,” Netflix chief legal officer David Hyman said. “We neither hold monopoly power nor engage in exclusionary conduct, and we’ll gladly cooperate, as we always do, with regulators on any concerns they may have.”
Shareholders are set to vote on the Netflix deal on March 20 at 8 a.m. ET. Netflix has said it expects a deal to close within 12 to 18 months, while Paramount has argued a potential deal with Warner Bros. would close within a year.
