The move intensifies a high-stakes bidding war with Netflix, which had been the preferred suitor for Warner’s movie and television studios and its HBO Max streaming service.
Paramount Sweetens the Deal
In its revised proposal, Paramount increased the termination fee to $7 billion — up from $5.8 billion — should regulatory approval not materialise.
It also agreed to pay Warner shareholders 25 cents per share per quarter for every quarter beyond September 30 that the deal remains pending.
Additionally, Paramount committed to injecting more equity if lenders raise concerns about financing.
Warner’s board said it has not yet determined whether Paramount’s updated offer is superior to Netflix’s bid but confirmed it would continue discussions.
Under the current agreement, Netflix has four business days to revise its offer if a superior proposal emerges.
Competing Structures
The bidding contest is complicated because the companies are not vying for identical assets.
Paramount’s $31-per-share offer is for the entire company. Netflix, meanwhile, has offered $27.75 per share — valuing the transaction at $82.7 billion including net debt — for Warner’s studios, content library, and HBO Max.
Warner plans to spin off its cable television division into a separately traded entity called Discovery Global.
The value of Netflix’s offer partly depends on Discovery Global’s future debt load and market valuation, which Warner estimates could add between $1.33 and $6.86 per share to shareholder returns.
Regulatory and Shareholder Pressure
Paramount argues it has a clearer path to US regulatory approval than Netflix. The company has also hinted at a potential board challenge if its proposal is rejected.
Activist investor Ancora Holdings has criticised Warner’s board for allegedly not engaging sufficiently with Paramount, while other shareholders have warned of possible lawsuits if Netflix ultimately prevails.
Warner Bros is scheduled to hold a shareholder vote on the Netflix deal on March 20.
Hollywood’s Crown Jewel at Stake
Either acquisition would significantly reshape Hollywood’s power structure, handing the winning bidder control of iconic franchises such as Batman, Harry Potter, Game of Thrones, and DC Comics.
With both Paramount and Netflix seeing declines in market capitalisation during the bidding process, analysts have questioned whether escalating offers are driven purely by business logic or competitive pressure.
Warner Bros and Paramount are expected to report quarterly earnings this week, which could further influence negotiations.