Warner Bros. Discovery $WBD ( ▼ 0.43% ) is reportedly reconsidering merger negotiations with Paramount $PSKY ( ▲ 0.68% ) after the company sweetened its takeover proposal, even though WBD already signed a binding agreement with Netflix $NFLX late last year. Paramount did not raise its $30-per-share cash offer, but added new incentives that significantly improve the total package.
The revised proposal includes covering WBD’s $2.8 billion breakup fee tied to the Netflix deal and paying shareholders a quarterly “ticking fee” if the transaction has not closed after 2026. Paramount also offered to support refinancing Warner Bros.’ debt, a major pressure point for the company.
Making it easier to walk away
By absorbing the breakup fee, Paramount removes one of the biggest barriers preventing WBD from exiting its current agreement. That changes the board’s calculation from whether it can afford to leave the Netflix deal to whether a better long-term outcome is possible elsewhere.
Some directors reportedly believe the improved terms could spark a higher bid in the future, either from Paramount itself or by forcing Netflix to sweeten its own agreement to keep the deal intact.
Streaming ambitions collide with debt realities
Warner Bros. Discovery controls valuable assets including HBO and a deep content library, making it a strategic prize in the ongoing consolidation of streaming media. At the same time, its sizable debt load makes refinancing support an attractive component of any acquisition offer.
Whether the board ultimately reopens negotiations remains unclear. What is clear is that the streaming shakeup may not be finished, and the fate of one of the industry’s biggest players is still very much in play.