Warner Bros. Discovery has been granted a seven-day waiver by Netflix to reopen negotiations with Paramount Skydance, injecting fresh volatility into a high-stakes battle for one of Hollywood’s most valuable combinations of streaming, studio and cable assets.
The temporary permission — which runs through February 23, 2026 — allows WBD to engage directly with Paramount Skydance to address what it described as unresolved “deficiencies” in Paramount’s hostile offer, even as WBD continues to recommend its pending transaction with Netflix. The company also said on Tuesday it would hold a special shareholder meeting on March 20.
Netflix gives WBD a narrow window to test Paramount’s offer
In a statement, Warner Bros. Discovery confirmed that Netflix had agreed to loosen restrictions under its merger agreement, enabling WBD to hold discussions with Paramount Skydance for a limited period.
“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,” Warner Bros. Discovery said in a release.
“During this period, WBD will engage with PSKY to discuss the deficiencies that remain unresolved and clarify certain terms of PSKY’s proposed merger agreement,” it said.
Netflix’s waiver comes as Paramount continues to press its case directly to shareholders, bypassing WBD’s board with a hostile tender offer. Paramount has been offering $30 per share, all-cash, for the entirety of Warner Bros. Discovery after losing a bidding contest for WBD’s streaming and studio assets to Netflix.
Paramount signals it could raise its bid to $31 per share
While Paramount has publicly insisted its $30 per share bid is not its “best and final,” the company has stopped short of formally raising the headline price, reported CNBC.
Warner Bros Discovery has declined Paramount Skydance’s (PSKY) recent $30-per-share takeover offer but has granted the Hollywood studio seven days to propose a more favourable deal to acquire the owner of HBO Max and the “Harry Potter” franchise, the company said on Tuesday, 17 February.
WBD said on Tuesday that a senior Paramount representative had privately indicated it would pay $31 per share if talks were reopened.
The manoeuvre places Paramount in a position to strengthen its offer without conceding that it had previously failed to present terms acceptable to WBD’s board. It also increases pressure on Netflix, whose current offer stands at $27.75 per share, all-cash, for WBD’s streaming and studio businesses.
Zaslav says WBD is focused on ‘value and certainty’
David Zaslav, WBD’s chief executive, framed the renewed talks as an exercise in accountability to shareholders rather than a shift in the company’s recommendation.
“Throughout the entire process, our sole focus has been on maximizing value and certainty for WBD shareholders,” said WBD CEO David Zaslav in a statement. “Every step of the way, we have provided PSKY with clear direction on the deficiencies in their offers and opportunities to address them. We are engaging with PSKY now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer.”
WBD also emphasised that the waiver is limited. After February 23, Netflix will retain its matching rights under the merger agreement — a contractual mechanism that could allow Netflix to respond with improved terms if WBD decides Paramount’s offer is superior.
Ted Sarandos: Paramount has been ‘flooding the zone with confusion’
Netflix co-chief executive Ted Sarandos said the waiver was designed to eliminate uncertainty, arguing that Paramount’s public campaign had distorted the process.
“Paramount had been making a ton of noise, flooding the zone with confusion for shareholders … including floating all these hypothetical offers and talking directly to the shareholders and bypassing the Warner Bros. Discovery board,” Sarandos said. “So we’ve given the opportunity to get those shareholders exactly what they deserve, which is complete clarity and certainty.”
Sarandos declined to discuss how far Netflix might go to raise its offer if Paramount returns with a stronger bid.
“I don’t want to get into the hypotheticals,” he said. “Let them make a move, and then we’ll see where the next step takes us.”
Paramount says it is ready to engage “in good faith”
Paramount responded by acknowledging WBD’s announcement and reaffirming its belief that its proposal is superior to the Netflix transaction.
“Although the Board’s actions are unusual, Paramount is nonetheless prepared to engage in good faith and constructive discussions,” Paramount said.
However, Paramount signalled that it would not pause its pressure tactics. The company said it would proceed with its tender offer and its intention to nominate directors to WBD’s board at the annual meeting.
WBD calls March 20 special shareholder meeting
Warner Bros. Discovery said it would hold a special shareholder meeting on March 20, and reiterated that its board continues to unanimously recommend the Netflix deal over Paramount’s offer.
Netflix described the meeting date as a key marker for its transaction.
“While we are confident that our transaction provides superior value and certainty, we recognize the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY’s antics,” Netflix said. “Accordingly, we granted WBD a narrow seven-day waiver of certain obligations under our merger agreement to allow them to engage with PSKY to fully and finally resolve this matter.”
Shares of Warner Bros. Discovery rose nearly 3 per cent on Tuesday, while Paramount shares gained about 5 per cent.
Regulatory scrutiny hangs over both Netflix and Paramount proposals
Despite the escalating numbers, neither proposal offers a clean path. Both potential transactions are expected to face intense regulatory review, and the question of which deal is more viable may prove as important as the headline price.
Industry insiders and lawmakers have raised concerns that a Netflix-WBD combination could bring together two of the most powerful streaming services, potentially limiting consumer choice and contributing to price increases.
Netflix has argued that its deal would preserve jobs and stabilise a media industry that has been battered by restructuring and layoffs.
Paramount, meanwhile, has pitched its offer as not only financially superior but also more likely to win government approval. Yet its bid carries its own complications, including antitrust concerns around combining two major film studios and expansive portfolios of pay television channels.
Foreign funding becomes a flashpoint in Paramount’s bid
Paramount’s proposal is financed in part by sovereign wealth funds from Saudi Arabia, Abu Dhabi in the United Arab Emirates, and Qatar. Paramount has said those investors would have no governance rights, but Netflix has raised the prospect of heightened scrutiny.
Netflix said it expects the structure to draw attention from regulators, including the Committee on Foreign Investment in the United States.
It also warned that European authorities may closely examine the role of Middle Eastern investors.
Given Europe’s aggressive antitrust enforcement record, the region could become decisive for either deal — even as the political posture of the United States remains uncertain.
President Donald Trump has said he has not been involved in the process and does not plan to be, though he has reportedly met with executives from both camps.
Sarandos rejected Paramount’s claims that it has a smoother regulatory route.
“PSKY does not have a faster regulatory path,” Sarandos told CNBC Tuesday. “I don’t know why the Ellisons would insinuate they have some inside track into the Department of Justice, but I can assure you they don’t. And in terms of our regulatory [position] in Europe and around the world, we are known entities and trusted entities with all the players in Europe.”
