Warner Bros. Discovery (WBD) said its Board of Directors has determined that a revised all-cash proposal from Paramount Skydance Corporation (PSKY) could reasonably be expected to lead to a “Company Superior Proposal” under WBD’s existing merger agreement with Netflix.
The updated offer values WBD at $31 per share in cash, up from $30, and includes a daily ticking fee equivalent to $0.25 per quarter beginning after September 30, 2026 until closing. The proposal also features a $7 billion regulatory termination fee payable by PSKY if the transaction fails due to regulatory issues, PSKY’s commitment to cover WBD’s $2.8 billion termination fee owed to Netflix if the current agreement is terminated, additional equity funding as required to support lender solvency certificates, and a revised Company Material Adverse Effect definition that excludes the performance of WBD’s Global Linear Networks business.
WBD emphasized that the Board has not yet concluded that the PSKY proposal is superior to the Netflix merger. The company will continue discussions with PSKY to assess whether a qualifying superior proposal can be reached. If the Board ultimately makes such a determination, Netflix will have a four-business-day match period to propose revisions to its transaction.
The Netflix merger agreement remains in force, and WBD reiterated that the Board continues to recommend the Netflix transaction and has not withdrawn or modified its recommendation.
Advisors to WBD include Allen & Company, J.P. Morgan, and Evercore as financial advisors, with Wachtell, Lipton, Rosen & Katz and Debevoise & Plimpton LLP as legal counsel.
During Paramount’s fourth-quarter earnings call, CEO David Ellison confirmed the higher $31-per-share offer and said Paramount would continue engaging with WBD’s Board. Paramount later welcomed the Board’s determination and reiterated the terms of its revised bid, noting that the Hart-Scott-Rodino waiting period expired on February 19, 2026. Any transaction would still require WBD to deem Paramount’s proposal superior, allow Netflix’s match period to lapse, terminate the Netflix agreement, and execute a definitive merger agreement with Paramount.