Paramount Skydance has increased its bid to acquire Warner Bros Discovery, raising the stakes in a takeover battle that could sideline rival suitor Netflix.
Warner Bros Discovery, which put itself up for sale last year, said Paramount had agreed to raise its offer by $1 per share, resulting in a proposal that its board had determined “could reasonably be expected to lead to a … superior proposal”.
The company said it would enter further discussions before deciding whether to walk away from the agreement it reached with Netflix in December.
Netflix, which has four days to submit a counter-offer, declined to comment immediately.
In a recent interview with the BBC, Netflix co-chief executive Ted Sarandos avoided saying whether the company would take part in a bidding war, describing the negotiations as “part of the process”.
“I don’t want to do hypotheticals,” he said, before the new Paramount bid was disclosed. “We very much like the deal where we’re at right now, we’re very disciplined buyers and we always have been.”
“This is all a process of price-discovery,” he added later.
Paramount, which is backed by tech billionaire Larry Ellison and run by his son David, has mounted an increasingly vocal campaign to acquire Warner Bros Discovery since last year, as it seeks to reinvent itself as a major Hollywood force.
Warner Bros Discovery has so far rejected Paramount’s approaches. Instead, it announced in December that it had agreed to sell its film and streaming businesses — including HBO — to Netflix in a deal valued at $27.75 per share, or about $82bn (£61bn) including debt.
Under that plan, Warner Bros Discovery would spin off the remainder of its operations, including its traditional television networks and news channel CNN, into a separate standalone company.
Following the rejection, Paramount revised its original proposal, which had offered $30 per share for the entire business. The latest bid marks the first time the company has formally committed to a higher price.
Warner Bros Discovery said Paramount is now offering $31 per share in cash, with additional compensation payable if completion is delayed.
Paramount has also agreed to pay $7bn if the transaction collapses and to cover the $2.8bn break-up fee Warner Bros Discovery would owe Netflix if it abandons the existing deal.
The Warner Bros Discovery board said it has not yet made a final decision.
Both takeover proposals have drawn scrutiny from lawmakers, who have raised concerns about market concentration and the potential impact on the broader entertainment industry.
At a hearing in Washington earlier this month, Sarandos was questioned about possible price increases for consumers and the future of movie theatres.
The Ellison family’s connections to the administration of Donald Trump have also attracted attention from Democratic lawmakers.
Warner Bros Discovery said it would “engage further … to determine if a proposal that constitutes a company superior proposal … can be reached”.
Speaking before Paramount’s revised offer was made public, Luke Stillman, managing director at US media and advertising consultancy Madison and Wall, said he believed Warner Bros Discovery was deliberately encouraging a bidding war and suggested the final price could rise to as much as $33 per share.
