Hollywood showdown: The fight for Warner Bros

Trainee solicitor Billy Hart dissects the corporate battle between Netflix and Paramount for Warner Bros

Warner Bros Discovery (WBD) is reportedly reconsidering whether to reopen negotiations with Paramount Global, and its partner Paramount Skydance, as a rival bid vies with an existing acquisition agreement with Netflix, thereby setting the stage for a renewed corporate showdown in Hollywood.

Netflix’s existing deal:

In December 2025, WBD’s board agreed to sell selected assets to Netflix in a deal valued at roughly $82.7 billion (£61.43 billion). This is about $27.75 (£20.61) per WBD share in cash and stock.

Netflix has since switched to an all-cash offer in an attempt to fight off the relentless efforts of Paramount. As things stand, this could be put before WDB shareholders to vote on as early as April.

The target assets include the Warner Bros studio and television production units (home to major franchises such as Harry Potter, DC, and Game of Thrones), as well as HBO Max streaming operations. The deal which Netflix put on the table does not extend to cover WBD’s cable networks such as popular US news station, CNN, and the once much beloved Cartoon Network.

Paramount’s hostile offer

Paramount Skydance has launched a hostile $108.4 billion (£80.52 billion) takeover bid, a straight $30 (£22.28) per share cash bid for 100% of WBD. Paramount’s bid covers the entirety of the company, snatching up those cable networks Netflix steered clear of.

This follows its initial offer of the same amount in December 2025, which was not accepted by WBD, despite the inclusion of a $40 billion (£29.7 billion) personal guarantee from Larry Ellison, the father of Paramount’s Chairman and CEO, David Ellison.

To increase the attractiveness of its fresh offer, Paramount has sweetened its terms, agreeing to:

● Fund the $2.8 billion (£2.08 billion) fee which WBD would owe to Netflix should they walk away from the existing merger agreement.

● Backstop approximately $1.5 billion (£1.19 billion) in potential refinancing costs associated with WBD’s debt restructuring, and reimburse shareholders if those costs are incurred and the deal fails to close.

● Pay a quarterly amount equal to $0.25 (£0.19) per share (around $650 million (£483 million) per quarter) if the transaction is not completed by December 31 2026.

Paramount has set a deadline of 2 March 2026 for WBD to accept. The offer has become even more tempting following clearance being secured from Germany’s foreign investment authorities. This, coupled with its compliance with US Department of Justice (DoJ) information requests, frames itself as ready to close quickly pending regulatory approval.

Certainty vs premium

WBD’s Board are now under pressure to reconsider whether Paramount’s tidied up bid constitutes a ‘superior proposal’ to that of Netflix. Under the terms of Netflix’s agreement, the board must determine that an unsolicited bid could: reasonably be expected to result in a superior outcome for shareholders before reopening negotiations.

If WBD chooses to reopen negotiations with Paramount, it must give Netflix a heads-up before doing so. The streamer would also be allowed to either match or raise its offer if it wants to continue the bidding war.

Netflix’s purchase would integrate one of the most recognisable content libraries and production houses into a dominant streaming platform, strengthening its position as a global powerhouse. On the other hand, Paramount’s bid seeks full ownership of WBD, encompassing wizards, gods, and news stations alike.

On the face of it, Paramount’s offer may appear to be the better deal. After all, it totals over $25 billion more in shareholder value (enough to buy Manchester United three times over!). However, WBD’s board unanimously agreed to support Netflix’s offer; and for good reason. Netflix’s offer is viewed as a deal more likely to close, and one which aligns more suitably with WBD’s strategy. Whilst Paramount offers more cash per share, its hostile nature carries significant execution and regulatory risks, including potential delays and integration challenges. On a risk-adjusted basis, Netflix’s offer provides greater certainty, and will see the library of WBD’s content join an already incredibly well established entity.

Antitrust authorities in the US and abroad are already evaluating the competitive implications, with concerns arising as to market concentration in the streaming landscape — a market rapidly expanding with the likes of Amazon Prime, Disney Plus, and Apple TV also occupying the space.

The Dark Knight rises… by 8%

Strip away the headline numbers, and the premium narrows considerably. Paramount’s $30 per share bid represents only a $2.25 (£1.67) uplift on Netflix’s $27.75 (£20.61) offer, thereby equating to roughly $8 billion in additional equity value. That effectively prices WBD’s cable networks at just over $2 (£1.49) per share.

Shareholders are being asked to jump horses for an incremental 8% premium, and to do so in favour of a hostile, more operationally complex transaction that folds in assets operating in declining markets. Cable television represents an undergoing long-term contraction driven by weaker advertising demand and deteriorating viewership. Against that backdrop, the additional $2.25 (£1.67) per share begins to look less like a windfall and more like compensation for taking on exposure.

Netflix’s decision to exclude the cable networks altogether suggests a strategic preference for scalable IP over ageing broadcast infrastructure. Paramount, by contrast, is proposing to acquire both the growth engines and the ballast. The modest premium therefore may not represent hidden value in the cable portfolio so much as the price of absorbing its risks.

Ultimately, the question for shareholders is not whether $30 is numerically higher than $27.75 (£20.61). It is whether $2.25 (£1.67) per share is sufficient to justify increased execution uncertainty, and long-term integration of assets whose economic trajectory remains challenged. Viewed through that lens, the headline premium appears far less commanding than it first seems.

What’s next?

WBD’s board has not yet publicly shifted its recommendation to opt for Netflix, and Paramount’s offer has so far failed to convince the board following multiple prior bids. However, the enhanced terms, including coverage of major financial liabilities and extra yield to shareholders, appear to have prompted a re-evaluation.

If the board decides Paramount’s proposal is superior, a second bidding war could erupt, potentially forcing Netflix to counter-sweeten its terms, and prompting broader strategic recalibration in Hollywood’s M&A landscape.

It’s a story rapidly developing, and one to keep a close eye on, but for now — in true
Looney Tunes style:

That’s all folks.