Warner Bros reconsiders Paramount's acquisition bid amid ongoing Netflix agreement

Entertainment conglomerate Warner Bros. Discovery is said to be reconsidering merger discussions with Paramount Skydance Corp. in the midst of an ongoing agreement with Netflix.

The renewed discussion between Warner Bros and Paramount follow revised takeover terms, as per Bloomberg News, stating that the former's board members are taking into account whether Paramount’s updated proposal would result a more advantageous transaction or cause a new bidding war with Netflix Inc.

As of now, Warner Bros. is firmly tied to its existing agreement with Netflix, and no formal decision has been reached with Paramount.

Paramount's new offer to buy Netflix

Paramount’s updated proposal reportedly addresses critical financial concerns by offering to cover the $2.8 billion termination fee Warner Bros. would incur if it exits the Netflix agreement.

Moreover, the aspirant has also proposed to support Warner Bros’ debt refinancing and compensate shareholders if the deal doesn’t close by December 31, indicating confidence in regulatory approval.

Prior to this development, Warner Bros. had agreed to sell its film studio and HBO Max streaming platform to Netflix in a deal valued at $27.75 per share.

However, Paramount has presented a $30-per-share offer, appealing directly to shareholders while lobbying regulators for approval of its alternative transaction.

Nevertheless, Warner Bros. is bound to notify Netflix in case it formally re-engages with Paramount, as Netflix has the right to match any superior offer.

With intense regulatory scrutiny and bidding at play, Warner Bros' next move is expected to affect the US media and streaming landscape.