Warner Bros. Recognizes Paramount’s Superior Bid; Netflix Withdraws

Warner Bros. Discovery has officially declared Paramount Skydance’s latest takeover proposal as a “superior” offer to its existing deal with Netflix, intensifying a heated bidding war that has gripped Hollywood. This move has led to Netflix stepping back from the competition, giving Paramount the edge in sealing the deal.

According to a statement released by Warner Bros. Discovery, the board determined that Paramount’s revised all-cash offer to acquire the entire company qualifies as a “company superior proposal” under the terms of their merger agreement with Netflix. This revised bid places Warner Bros. Discovery’s value at approximately $111 billion, or $31 per share, surpassing Netflix’s $83 billion agreement announced in December.

In response, Paramount included various protective measures in its bid to reassure Warner Bros. Discovery and its shareholders. These protections range from a $7 billion reverse termination fee if regulatory hurdles arise, to a commitment to cover Warner Bros. Discovery’s breakup fee owed to Netflix if the original agreement falls through. Paramount has also pledged a “ticking fee” of 25 cents per share per quarter if the closing process extends beyond a specified timeline. These safeguards aim to reduce risks and provide additional financial backing if required.

Investors had expressed concerns about the implications of the Warner Bros. Discovery deal on Netflix’s strategic direction and regulatory challenges. Despite this, Netflix’s stock rose following Paramount’s increased bid, signaling investor approval at the prospect of Netflix exiting the deal and avoiding the burden of acquiring legacy Hollywood assets.

While Paramount’s offer faces regulatory uncertainties, structured as a conventional studio-and-networks consolidation, it would create a formidable media powerhouse comparable in scale to Disney and Comcast’s NBCUniversal.

The bidding war has also caught the eye of political figures, with President Donald Trump initially indicating involvement in the process, before backtracking on that stance. The negotiations have led to mixed reactions from various stakeholders, accentuating the high-stakes nature of the deal.

As of February 26, 2026, Netflix has officially withdrawn from the competition, marking a significant turning point in the ongoing battle for Warner Bros. Discovery.