Warner Bros (WBD) Stock: Paramount Bid Gains Momentum as Netflix Deal Faces Antitrust Hurdles

TLDR

• Warner Bros. Discovery (WBD) may reopen negotiations with Paramount Skydance after the company enhanced its $78 billion offer with a $650 million quarterly ticking fee and breakup fee coverage.
• The current $82.7 billion Netflix deal faces regulatory challenges from Trump administration antitrust officials concerned about streaming market dominance.
• Paramount committed to cover WBD’s $2.8 billion Netflix breakup fee and up to $1.5 billion in debt refinancing costs to secure the deal.
• CEO David Zaslav is reportedly seeking Paramount to increase its $30 per share offer above $85 billion total to surpass Netflix’s $27.75 per share bid.
• Ancora Holdings opposes the Netflix deal with a $200 million stake, while only 42.3 million WBD shares have been tendered supporting Paramount’s offer.

Warner Bros. Discovery is weighing a critical decision between two competing billion-dollar offers. The media company’s board is considering whether to reopen talks with Paramount Skydance after rejecting its initial proposal.

Warner Bros. Discovery, Inc., WBD

Paramount enhanced its $78 billion all-cash offer on February 10. The company added a $650 million quarterly ticking fee if the deal extends past December 31.

The enhanced terms include coverage of WBD’s $2.8 billion breakup fee to Netflix. Paramount also committed up to $1.5 billion for debt refinancing costs.

These additions demonstrate Paramount’s determination to win the bidding war. The company believes it can secure regulatory approval faster than Netflix.

Netflix Deal Encounters Washington Roadblocks

Netflix and WBD signed an $82.7 billion agreement in December. That deal is now facing serious challenges from federal regulators.

Trump administration antitrust officials are examining Netflix’s position in the streaming market. A GOP operative familiar with the situation stated the Netflix deal is “going nowhere with the executive branch.”

The regulatory scrutiny centers on potential streaming monopoly concerns. Officials question whether combining Netflix with HBO Max creates excessive market concentration.

DOJ antitrust chief Gail Slater recently resigned under White House pressure. Her departure could extend the review timeline to six months or longer.

If the DOJ blocks the deal and Netflix litigates, the process could stretch another year. This uncertainty is pushing WBD to reconsider its options.

The Path Forward for WBD

WBD must notify Netflix before reopening talks with Paramount. Netflix would then receive an opportunity to match any improved Paramount offer.

CEO David Zaslav is hoping Paramount increases its $30 per share bid. Sources say he wants the total package to exceed $85 billion.

Netflix’s current $27.75 per share offer relies on selling WBD’s cable properties. The valuation of those assets remains uncertain in today’s media landscape.

Both bidders have indicated willingness to raise their offers. However, Netflix’s stock price declined during the bidding process, potentially limiting its flexibility.

WBD plans to announce its Q4 2025 earnings date this week. Investors are also awaiting the special shareholder vote date on the Netflix transaction.

Shareholder Response and Legal Pressure

Ancora Holdings accumulated a $200 million stake in WBD. The investment firm publicly opposes the Netflix deal.

Despite this opposition, only 42.3 million shares have been tendered supporting Paramount. That represents less than 2% of outstanding shares.

Paramount filed a lawsuit against WBD claiming the company favors Netflix due to personal relationships. The suit alleges CEO Zaslav’s friendship with Netflix co-CEO Ted Sarandos influenced the decision.

People close to Paramount say the company hadn’t heard from WBD about reopening talks as of Sunday night. Some observers believe WBD may be using media leaks to protect against litigation.

Analysts maintain a cautious outlook on Paramount Skydance. PSKY stock carries a Moderate Sell consensus rating on TipRanks based on zero Buys, one Hold, and three Sells.

The average price target of $12.33 suggests 19.5% upside from current levels. PSKY shares dropped 8.7% over the past year.