Netflix grants Warner Bros. Discovery 7-day waiver to reopen deal talks with Paramount Skydance

Warner Bros. Discovery on Tuesday mentioned it would reopen deal talks with Paramount Skydance underneath a seven-day waiver from Netflix to discover “deficiencies” in Paramount’s provide to purchase everything of WBD.

The legacy media firm has a pending transaction with Netflix for its streaming and studio companies. Paramount launched a hostile tender provide straight to WBD shareholders at $30 per share after shedding out to Netflix in a bidding battle.

“Netflix has supplied WBD a restricted waiver underneath the phrases of WBD’s merger settlement with Netflix, allowing WBD to interact in discussions with Paramount Skydance (“PSKY”) (NASDAQ: PSKY) for a seven-day interval ending on February 23, 2026 to search readability for WBD stockholders and supply PSKY the flexibility to make its greatest and closing provide,” Warner Bros. Discovery mentioned in a launch.

“Throughout this era, WBD will interact with PSKY to focus on the deficiencies that stay unresolved and make clear sure phrases of PSKY’s proposed merger settlement,” it mentioned.

Paramount management has repeatedly mentioned its $30 per share, all-cash provide will not be its “greatest and closing.” Final week the corporate sweetened its provide with further “enhancements,” however stopped in need of elevating the per-share worth.

Warner Bros. Discovery mentioned Tuesday {that a} senior Paramount consultant knowledgeable a WBD board member that it will pay $31 per share if deal talks have been to reopen.

After the restricted waiver interval, Netflix will retain its matching rights supplied by the merger settlement, WBD mentioned.

“All through your entire course of, our sole focus has been on maximizing worth and certainty for WBD shareholders,” mentioned WBD CEO David Zaslav in an announcement. “Each step of the way in which, we now have supplied PSKY with clear route on the deficiencies of their provides and alternatives to handle them. We’re partaking with PSKY now to decide whether or not they can ship an actionable, binding proposal that gives superior worth and certainty for WBD shareholders via their greatest and closing provide.”

WBD additionally on Tuesday introduced a particular assembly of shareholders shall be held on March 20 and mentioned its board continues to unanimously suggest the Netflix deal over Paramount’s provide.

Netflix mentioned in an announcement the shareholder assembly date marked an “vital milestone for our transaction with WBD.”

“Whereas we’re assured that our transaction supplies superior worth and certainty, we acknowledge the continued distraction for WBD stockholders and the broader leisure trade brought on by PSKY’s antics,” Netflix mentioned. “Accordingly, we granted WBD a slim seven-day waiver of sure obligations underneath our merger settlement to enable them to interact with PSKY to absolutely and eventually resolve this matter.”

Shares of Warner Bros. Discovery have been up about 3.5% Tuesday. Shares of Paramount have been up about 6%.

Both proposed buy of Warner Bros. Discovery belongings comes with regulatory questions.

Media trade insiders and lawmakers have questioned whether or not Netflix’s proposed deal would win approval as it will convey collectively two of the highest streaming providers and will end in larger costs for shoppers.

Netflix management has repeatedly mentioned the corporate believes it will win regulatory approval for the deal as a result of it will protect jobs in a challenged media panorama rife with layoffs.

Paramount has sounded the alarm to WBD shareholders, nonetheless, and argues its provide will not be solely higher however would extra simply garner authorities assist.

On the flipside, Paramount’s provide has raised questions of international funding and antitrust concerns in bringing collectively two giant portfolios of pay TV channels and two main movie studios.

Paramount’s deal is financed partially by sovereign wealth funds of Saudi Arabia; Abu Dhabi, United Arab Emirates; and Qatar. Paramount has mentioned these entities have agreed to forgo any governance rights.

In its assertion on Tuesday, Netflix known as out the international funding, which it mentioned it expects to come underneath scrutiny from worldwide regulators, together with the Committee on Overseas Funding in the US (CFIUS). Netflix mentioned it additionally expects European authorities “to scrutinize the Center Jap buyers in PSKY’s consortium and to be skeptical of claims that they’re purely passive buyers.”

Given Europe’s monitor report of antitrust enforcement, it is attainable regulatory battles for both deal can be received or misplaced in that market. In fact, the query nonetheless looms of how President Donald Trump will view both transaction. Trump lately mentioned he hadn’t been concerned within the course of thus far and did not plan to be, although he has reportedly met with executives from every camp.

Netflix’s assertion on Tuesday “unsurprisingly factors to plenty of arguments Netflix believes it has in its favor,” in accordance to an analyst notice from Raymond James on Tuesday, “together with higher prospects for approval, a clearer nationwide safety image, and monetary safety.”