Warner Bros Discovery Inc has agreed to temporarily reopen sale negotiations with Paramount Skydance Corp after Paramount raised its bid, setting up the possibility of a renewed bidding contest even as Warner Bros continues to back its deal with Netflix Inc.
Warner Bros said it secured a waiver from Netflix, allowing it to engage with Paramount for seven days to discuss the terms of its latest offer.
The move followed a communication from a Paramount banker indicating the company would offer at least $31 per share, which is $1 higher than its previous proposal. Paramount also indicated the offer was not its best and final bid.
Despite reopening talks, the Warner Bros board said it continues to unanimously recommend that shareholders vote in favour of the binding agreement to sell its studios and HBO Max streaming business to Netflix for $27.75 per share. A shareholder vote on the Netflix deal has been scheduled for March 20.
Chief Executive Officer David Zaslav said the board’s focus remains on maximising value and certainty for shareholders.
Following the announcement, Warner Bros shares rose 2.5 percent in premarket trading in New York, while Paramount gained about 4 percent and Netflix rose less than 1 percent.
Under the waiver, Warner Bros can engage with Paramount until February 23 and has asked for a best and final proposal. If the board later determines that Paramount has made a superior offer, Netflix will have the right to match it.
Netflix said it remains confident that its transaction has a clear path to timely regulatory approval and is the only signed, board-recommended agreement currently in place.