Warner Bros. board gives Netflix four days to improve merger offer

Warner Bros. Discovery's board has determined that a takeover proposal from Paramount Skydance Corporation is superior to its existing merger agreement with Netflix, setting up a potential bidding war for the US media giant.

Warner Bros. said Wednesday its board had concluded that the Paramount offer constitutes a "Company Superior Proposal" under the terms of its Netflix merger agreement.

Under the Netflix merger deal, Warner's notification triggers a four-business-day window during which Netflix may revise its offer.

If the Netflix counteroffer fails to satisfy the board, Warner Bros. would be free to terminate its agreement with the streaming giant and proceed with Paramount.

Warner Bros. stressed that the existing merger agreement with Netflix remains in force and that its board continues to recommend the Netflix transaction, saying it had not withdrawn or modified that recommendation.

The sweetened offer was the latest installment of a bidding war set to reshape Hollywood and US media, and has drawn White House attention, with President Donald Trump insisting he will have a say on the outcome.

The revised Paramount offer includes a purchase price of $31.00 per share in cash, a one-dollar-per-share increase from its earlier offer, which was valued at around $108 billion.

Paramount has also offered a $7 billion regulatory termination fee should the deal fail to close on regulatory grounds, and agreed to cover the $2.8 billion breakup fee Warner Bros. would owe Netflix if it walks away from their agreement.

Netflix is offering $83 billion for its more limited merger but was thought to be prepared to raise its offer to match its rival's new bid.

The proposal also includes a commitment from Oracle founder Larry Ellison to contribute additional funding if needed to support solvency requirements from Paramount's lending banks.

Ellison is the father of Paramount Skydance CEO David Ellison and largely financed his son's takeover of Paramount and his subsequent bid for Warner Bros.