Warner Bros. Discovery has rejected Paramount Skydance’s revised $30-a-share hostile takeover bid but is granting the rival studio seven days to submit what it calls a “best and final” offer.
The move comes as Warner continues to advance its agreed merger with Netflix, setting up a high-stakes contest for control of the company’s film, television and streaming assets.
Paramount has until February 23 to present an improved proposal, which Netflix is permitted to match under the terms of its merger agreement with Warner.
Shares of Paramount rose 1.7% in premarket trading, while Warner Bros. gained 2.5%.
Paramount’s current bid values the entire company at $108.4 billion, offering $30 per share, with informal indications it could raise the price to $31 or higher if negotiations proceed.
Netflix’s deal values Warner’s studio and streaming businesses at $27.75 per share, or $82.7 billion, and excludes its cable networks, which would be spun off into a separate publicly traded entity known as Discovery Global.
Warner said its board has not determined that Paramount’s proposal is reasonably likely to result in a superior transaction to the Netflix merger.
The company added that it expects any final proposal from Paramount to exceed $31 per share.
Paramount recently amended its offer to include additional cash payments if closing is delayed and agreed to cover a $2.8 billion breakup fee owed to Netflix.
However, Warner cited unresolved issues, including financing contingencies and responsibility for potential fees tied to debt funding.
The decision to reopen talks follows pressure from activist investor Ancora Holdings and from Pentwater Capital Management, which backs Paramount’s bid and has proposed adding a director to Warner’s board.
Paramount has argued that prior deficiencies in its offer have been addressed.
Netflix, while expressing confidence in its agreement, granted Warner a limited waiver to engage with Paramount for seven days.
The streaming company criticized Paramount’s financing structure and said the competing bid poses risk and regulatory scrutiny.
Warner shareholders are scheduled to vote on the Netflix merger on March 20.
The outcome could reshape ownership of some of Hollywood’s most prominent studios and streaming platforms.