WBD reopens Paramount negotiations for one week with Netflix’s blessing

After reports hit over the weekend that Warner Bros. Discovery was considering reopening merger talks with Paramount after a series of sweetened deal terms designed to lure the company away from its current pact with Netflix, the company is making its dalliance official.

On Tuesday, WBD announced it would resume active negotiations with Paramount for one week after Netflix granted the company a waiver to pursue the transaction despite already having a deal in place themselves.

“Netflix has provided WBD a limited waiver under the terms of WBD’s merger agreement with Netflix, permitting WBD to engage in discussions with Paramount Skydance for a seven-day period ending on February 23, 2026 to seek clarity for WBD stockholders and provide PSKY the ability to make its best and final offer,” the press release read.

The announcement indicates Paramount informed the WBD board that, if WBD is willing to reengage, it would immediately raise its offer from $30 to $31 per share, in addition to the other sweeteners it has already put into its initial agreement. Such sweeteners, as reported last week, include a $650 million “ticking fee” that Paramount would pay WBD each quarter the deal hasn’t closed, paying the $2.8 billion breakup fee WBD would owe Netflix for reneging on its current agreement, and eliminating $1.5 billion in financing costs tied to WBD’s debt refinancing.

However, it’s believed that the $31 per share price is not Paramount’s “best and final offer,” as WBD is seeking. Throughout the next seven days, Paramount could very well increase the price it is offering per share yet again, putting more pressure on the WBD board to decide whether its offer is superior to the Netflix deal.

Paramount is looking to buy the whole of WBD, including its legacy cable assets like TNT Sports and CNN that are set to be spun off as part of the Netflix deal. Netflix is offering to buy only the streaming and studio assets.

In a statement from Netflix, the streaming giant asserted it still believes its offer is superior to that of Paramount, but wants to “fully and finally resolve this matter,” so it can focus on receiving regulatory approval for its deal rather than fending off a takeover bid.

For now, WBD still believes the Netflix offer is in the best interest of shareholders, primarily due to the financing structure of the competing deals. Analysts suggest Paramount’s offer functionally amounts to a leveraged buyout reliant primarily on debt financing to complete the purchase. Netflix’s offer protects shareholders “against downside risk” associated with Paramount needing to service its debt.

Still, at a certain point, the size of Paramount’s offer might be too much to pass up. Paramount will need to put up or shut up in the next seven days if it wants WBD to seriously consider its offer.