Paramount's Final Bid Will Force Netflix Into a Bidding War for Warner Bros. Discovery

5 predicted events · 11 source articles analyzed · Model: claude-sonnet-4-5-20250929

# The Bidding War Intensifies: What's Next for Warner Bros. Discovery

A high-stakes battle for control of Warner Bros. Discovery—home to franchises like Harry Potter, Game of Thrones, and DC Comics superheroes—has reached a critical juncture. After rejecting Paramount Skydance's $30-per-share offer, Warner Bros. has granted its rival one week to submit a "best and final" offer, setting up what could become one of the most dramatic bidding wars in recent Hollywood history.

The Current Landscape

As of February 17-18, 2026, the situation stands as follows: Netflix holds a preferred bidder position with an $82.7 billion deal to acquire Warner Bros. Discovery's streaming and studio divisions. However, Paramount Skydance—backed by CEO David Ellison and Middle Eastern investors including Saudi Arabia's Public Investment Fund—is pursuing an acquisition of the entire company and has indicated willingness to pay at least $31 per share, with signals that this isn't their ceiling (Articles 3, 5, 9). According to Article 3, Warner Bros. has given Paramount until February 23 to submit their enhanced proposal. Netflix has granted a seven-day waiver allowing these discussions, demonstrating confidence in their position while acknowledging the competitive threat (Article 9). Crucially, Article 1 reveals that if Paramount's revised offer is deemed superior, Netflix will have four days to match or exceed it.

Key Market Signals

Article 2 provides a critical insight: trading patterns suggest market participants expect a sweetened offer is coming. This market behavior indicates sophisticated investors believe the bidding war is far from over and that one or both parties will increase their bids significantly. The structural differences between the two offers create distinct advantages and challenges. Netflix's proposal targets only the streaming and studio divisions, while Paramount wants the entire Warner Bros. Discovery company. Additionally, as Article 6 emphasizes, Warner Bros. has repeatedly highlighted that Netflix's binding agreement provides more certainty than Paramount's proposal, which includes termination rights and operational restrictions.

Predicted Outcomes

### Paramount Will Submit an Aggressive Final Offer By the February 23 midnight deadline, Paramount will almost certainly submit an offer exceeding $32 per share—likely in the $33-35 range. The evidence is compelling: a Paramount banker explicitly told Warner Bros. board members that $31 "is not PSKY's best and final proposal" (Articles 3, 9). Paramount has already demonstrated willingness to cover the $2.8 billion Netflix termination fee, signaling serious commitment. The company wouldn't have pushed for reopened negotiations without confidence in its ability to present a materially superior offer. ### Netflix Will Match or Exceed Paramount's Bid Once Paramount's enhanced offer arrives, Netflix faces a strategic decision with only four days to respond (Article 1). Given Netflix's public statements about "foreign funding" raising "serious national security concerns" (Article 9), the streaming giant has positioned this as more than a business transaction—it's a matter of strategic importance. Netflix is unlikely to walk away after investing significant resources and political capital. Expect Netflix to match Paramount's offer and potentially add terms that address Warner Bros.' concerns about deal certainty. ### The Warner Bros. Board Will Leverage Both Bidders Warner Bros. has masterfully orchestrated this process, creating genuine competition while maintaining leverage. The board's February 17 letter (Article 6) explicitly asked Paramount to accept Netflix's superior deal terms while increasing price. This isn't just about money—it's about extracting optimal terms across multiple dimensions: price, deal certainty, operational flexibility, and transaction structure. The board will use each bidder's proposal to pressure the other into better terms. ### National Security Review Will Become a Major Factor Article 9 reveals that Netflix has already begun raising concerns about Paramount's Middle Eastern funding partners, citing a Congressional letter questioning Saudi Arabia's involvement. As the bidding intensifies, expect these concerns to escalate. Representative Sam Liccardo's involvement suggests CFIUS (Committee on Foreign Investment in the United States) review could become a significant hurdle for Paramount. This regulatory angle gives Netflix a strategic advantage beyond pure financial terms. ### The Final Winner Will Pay a Premium Price Whichever company ultimately prevails will pay significantly more than Netflix's current offer. Market behavior described in Article 2 confirms trader expectations of price escalation. With Warner Bros. shareholders voting March 20 (Article 3), both bidders face time pressure that typically drives prices higher. The final acquisition price will likely exceed $35 per share, representing a substantial premium over Paramount's initial $30 offer.

The Critical Week Ahead

The period between February 18-27 will determine this deal's outcome. Paramount must submit its best offer by February 23, followed by Netflix's four-day response window. Both companies are negotiating not just on price, but on deal structure, regulatory approval likelihood, and operational control during the transaction period. The stakes extend beyond financial returns. This acquisition will reshape the streaming landscape, consolidate major entertainment franchises, and potentially influence how media assets are valued in an AI-driven content environment (Article 4). For Warner Bros. shareholders, the bidding war represents an opportunity to extract maximum value from assets that include some of entertainment's most valuable intellectual property. Ultimately, Netflix's combination of financial strength (repeatedly cited by Warner Bros. as a key advantage in Articles 3 and 6), deal certainty, and freedom from foreign investment scrutiny positions them as the likely winner—but only after Paramount forces them to pay a significantly higher price than initially offered.