Netflix Gives WBD a Week to Talk with Paramount

With input from CNBC and the New York Times.

Netflix just handed Warner Bros. Discovery a narrow seven-day window to reopen talks with Paramount Skydance, and the media takeover drama is back on. The waiver runs through Feb. 23 and gives Paramount one last shot to clean up terms and make a “best and final” bid for the whole company.

Warner Bros. Discovery said it will use the time to press Paramount on lingering “deficiencies” in its $30-per-share hostile offer. Board and management want clarity on financing, walk-away rights and who covers what if the deal stumbles. If Paramount can fix those gaps, WBD will consider a binding proposal — but the board still recommends the Netflix deal for now.

Netflix, which already has a signed pact to buy WBD’s streaming and studio assets, agreed to the limited waiver while reserving the right to match any superior offer. Netflix called its deal the cleaner, safer option and framed Paramount’s moves as distracting for shareholders.

Paramount Skydance hasn’t publicly upped the price, but a senior Paramount rep reportedly told a WBD director the company would pay $31 a share if talks reopened — and that it could sweeten the package further. Paramount has also tried to narrow objections by offering to cover the $2.8 billion termination fee WBD would owe Netflix and to backstop debt costs; it even dangled extra cash for shareholders if the deal drags into later quarters.

WBD’s CEO, David Zaslav, put it bluntly: the company wants “superior value and certainty” for shareholders. That’s why the board asked for a short, surgical run of talks — not an open-ended auction. The company also set a special shareholders’ meeting for March 20 to vote on the Netflix transaction, a date investors will be watching closely.

Not everyone thinks WBD should have paused. Activist investors like Pentwater Capital Management pushed publicly for the board to reengage with Paramount, arguing shareholders deserve a real price fight. Their pressure appears to have helped pry open Netflix’s waiver.

What to watch this week: will Paramount firm up pricing or stick to limits? Will Netflix blink — and match or top any improved bid — if the offer looks truly superior? And can WBD’s board square the need to extract more value with the risk of scaring off regulators or scuttling the Netflix tie-up?

A lot can change in seven days. For now, the market’s taking the news as a temporary truce: WBD and Paramount shares ticked up in premarket trade, while Netflix’s stock held steady. The real winners — or losers — will be whatever deal the shareholders end up voting on in March.