The tug-of-war for one of Hollywood’s most storied empires has entered a decisive stage. Warner Bros. Discovery (WBD) has officially reopened the door for takeover talks with Skydance-owned Paramount to hear the company’s “best and final” offer. 

This pivot comes after Netflix issued a 7-day waiver to the WBD board to clarify the finer details of both deals. In the meantime, Warner’s board is still recommending shareholders’ support of its proposed merger with Netflix.

The seven-day waiver: A brief window of opportunity

In a regulatory filing on Tuesday, Warner Bros. Discovery revealed it received a specific waiver from Netflix to engage with Paramount for one week ending next Monday. As per reports published by the Associated Press, this window is intended to address unresolved “deficiencies” and clarify the finer points of Paramount’s latest bid.

Despite being allotted a window to engage in fresh talks with Paramount, Warner’s board of directors is not backing down from its current path. The board continues to recommend that shareholders vote in favour of the proposed merger with Netflix. 

A special shareholder meeting to decide the company’s fate is currently scheduled for Friday, March 20.

Netflix vs. Paramount: Comparing the offers

The battle for control of WBD’s operations is uniquely complex because the two suitors are chasing very different visions for WBD’s future that could technically re-define hollywood’s storyscape for the coming decades.

The Netflix Deal: Agreed upon in December, Netflix aims to acquire Warner’s studio and streaming business (including HBO Max) for $72 billion in cash. Including debt, the total enterprise value is approximately $83 billion ($27.75 per share). This deal would follow a planned spin-off of Warner’s cable operations.

The Paramount Bid: Unlike Netflix, Paramount wants to acquire Warner’s entire company, including networks like CNN and Discovery. To make this acquisition possible, Paramount went straight to shareholders with an all-cash, $77.9 billion hostile offer with a total enterprise value of $108 billion ($30 per share). 

Notably, the Associated Press reports that Paramount has privately signaled to WB shareholders that it could raise its offer to $31 per share pending ‘further engagement’.

Why did Netflix issue such a waiver? 

Netflix issued the waiver to clarify all details of the arrangement following what the company described as the execution of ‘pesky antics’ from Paramount. In a statement, the streaming pioneer noted it granted the waiver to “finally resolve this matter,” while dismissing Paramount’s recent manoeuvres as “antics” that have distracted the industry.

In a statement reported by the Associated Press, the streaming pioneer expressed confidence that its transaction provides “superior value and certainty.”

Paramount’s recent manoeuvres (bidding war intensifies)

Paramount is pulling out all the stops to undermine the Netflix agreement. Beyond the higher share price, Paramount has pledged to cover the $2.8 billion breakup fee Warner would owe Netflix if their original agreement is scrapped.

Furthermore, as a part of their most recent efforts to ‘sweeten the deal’, Paramount recently introduced a “ticking fee”—a promise to pay shareholders an additional 25 cents per share for every quarter the deal remains unclosed after December 31. 

Analyst view: Is Netflix losing the lead?

Market experts suggest the tide could turn if the numbers continue to climb. Analysts at Raymond James said that they have “long believed” Paramount was willing to raise its offer. 

“If Paramount ups its price to $32 or $33 per share, it becomes increasingly difficult to argue the Netflix agreement is superior,” the analysts told the Associated Press, adding that while Netflix is still in the “driver’s seat,” it is now being forced to defend its case more aggressively.

Monopoly concerns?

Regardless of who wins the bidding war, the finish line remains far off. Any merger of this magnitude faces intense scrutiny from global regulators. The U.S. Department of Justice has already initiated reviews, with lawmakers expressing concerns over market consolidation in the entertainment sector.

For now, the markets are responding with optimism. On Tuesday, Warner Bros. Discovery shares rose over 3%, while Paramount Skydance climbed 5%, signalling that investors are bracing for a potential bidding war that could redefine the Hollywood landscape.

As the Monday deadline approaches, the industry is watching closely to see if Paramount can finally sway Warner’s board or if Netflix will be forced to raise its own stakes to secure the deal.