Paramount Expected To Raise Offer to $32 Per Share As Paramount WBD Battle Intensifies, Netflix Signals It May Walk Away

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The competition between Paramount and Warner Bros. Discovery is heating up, and Paramount is likely to make a higher offer. This could put pressure on Netflix to either join the bidding war with an even bigger offer or withdraw from negotiations.

A recent report from Variety says Paramount has until Monday to make what might be its best offer so far in the ongoing fight to merge with another company. This is a crucial moment in the negotiations.

Paramount Preparing a Higher Bid

Sources say Paramount Skydance is planning a new offer for the company that will likely be higher than their previous bid of $30 per share, potentially around $32 per share.

Warner Bros. Discovery gave Paramount a week to refine its offer, with Netflix’s approval. This negotiation period ends at 11:59 p.m. Eastern Time on February 23rd.

If Paramount officially increases its offer, Netflix will have four days to either match it or end negotiations.

Netflix Signals Willingness To Walk

Ted Sarandos, a co-CEO at Netflix, has suggested the company likely won’t participate in intense bidding competitions.

According to Netflix co-CEO Ted Sarandos, the decision on future deals now rests with others. In a February 20th interview with Variety, Sarandos stated that they already have a firm agreement with Warner Bros. Discovery. He explained that if another company were to offer more favorable terms – something the Warner Bros. Discovery board hasn’t seen yet – they would consider it. Sarandos emphasized Netflix’s cautious approach to acquisitions, adding that they are prepared to pass on deals and allow competitors to overspend if necessary, a strategy they’ve successfully employed in the past.

Many people believe that comment suggests Netflix might stop trying to acquire Paramount if the cost becomes too expensive.

The $2.8 Billion Breakup Fee Looms

One major complication is the massive breakup fee built into the current Netflix agreement.

If Warner Bros. Discovery agrees to Paramount’s offer, they’ll have to pay Netflix $2.8 billion to end their existing deal. Paramount has said they’d handle that payment, likely to encourage the Warner Bros. Discovery board to accept their bid.

Warner Bros. Discovery has hinted that Paramount’s initial offer wasn’t their last attempt, suggesting they might increase it.

According to a letter reported by Variety, Warner Bros. Discovery CEO David Zaslav and board chairman Samuel Di Piazza Jr. stated that Paramount had signaled willingness to pay $31 per share, but that this wasn’t the highest offer made by PSKY (Paramount Global).

Analysts Expect Bidding To Heat Up

Analysts on Wall Street are carefully observing Paramount’s next moves, and are also wondering if Netflix will react.

According to MoffettNathanson’s Robert Fishman, the key question is now how much PSKY is prepared to pay, and whether Netflix will respond by increasing its own bid to match it.

Fishman believes Paramount will likely raise the price of PSKY to at least $32 per share, putting pressure on Netflix (NFLX) to increase their offer, potentially to around $30 per share.

He also cautioned that Netflix might not benefit financially from a higher price, explaining that it would be hard to justify an offer exceeding $30 per share.

The analyst ultimately predicted Netflix could step away if the price climbs too far.

The analyst believes that owning Warner Bros., HBO, and HBO Max would be valuable in the long run. However, they anticipate Netflix will likely withdraw from the deal if Paramount Global significantly raises its offer above $32 per share. If Paramount doesn’t aggressively pursue the acquisition during this period, it could allow Netflix to secure the deal with a smaller price increase over its current bid, making it harder for Paramount to win.

Political Noise Enters The Picture

The merger drama has also drawn outside attention.

President Trump recently demanded that Netflix remove Susan Rice from its board, but Netflix CEO Ted Sarandos defended Rice and dismissed the call.

I heard Sarandos say that the person in question is really active on social media, but he wanted to make it clear this whole thing is a business decision, not about politics at all.

The Justice Department is now taking a closer look at the planned merger between Netflix and Warner Bros. Discovery. They’re investigating whether the combined company would limit choices and competition for consumers in the entertainment industry.

Netflix has strongly rejected monopoly concerns.

Netflix’s chief legal counsel, David Hyman, stated that the company operates in a very competitive market and therefore claims of monopolistic behavior are untrue. He affirmed that Netflix doesn’t have monopoly power, doesn’t unfairly exclude competitors, and will continue to work with regulators on any issues they raise.

A Pivotal Week Ahead

As Paramount is likely to increase its offer and Netflix is emphasizing cost control, the competition between Paramount and Warner Bros. Discovery is reaching a critical point.

If Paramount makes a strong offer, but Netflix doesn’t budge, those who own stock in Warner Bros. Discovery might have to decide whether to accept Netflix’s guaranteed deal or take a chance on a potentially more lucrative, but less certain, offer from Paramount.

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2026-02-24 01:57