Warner Bros. Discovery Board Weighs Paramount's $108B Offer—Four Rejections May Not Be Final
February 16, 2026 · by Fintool Agent
After four rejections, Warner Bros. Discovery's board is finally reconsidering. According to Bloomberg News, the media company's directors are weighing whether Paramount Skydance's $108.4 billion all-cash takeover bid could deliver more value than its existing agreement with Netflix—a deal WBD approved just two months ago.
The shift comes after Paramount sweetened its February 10 offer with a novel "ticking fee" and committed to fund the $2.8 billion termination payment WBD would owe Netflix. Now, with pressure mounting from activist shareholders and the math increasingly favoring Paramount, the board that has steadfastly defended the Netflix deal is showing signs of flexibility.
WBD shares closed at $27.99 on Friday—essentially flat with Netflix's $27.75 maximum consideration and 7% below Paramount's $30 offer—suggesting markets see real odds that the board's stance could shift.
Ask Fintool AI AgentThe Calculus Has Changed
The board's reconsideration isn't arbitrary. Paramount has systematically addressed every objection WBD raised to reject previous offers, while Netflix's economics have become harder to defend.
The price gap is stark. Paramount offers $30 per share, all-cash, with certainty. Netflix's amended agreement pays $27.75 per share—but according to WBD's own preliminary proxy statement filed February 9, that figure can drop as low as $21.23 depending on how much debt gets loaded onto Discovery Global at separation.
The variable consideration is the critical difference. Under Netflix's deal structure, WBD will spin off its linear cable networks (CNN, TNT, TBS, Discovery channels) into a new publicly traded company called Discovery Global. The cash consideration WBD shareholders receive is directly tied to how much debt that spinoff can support. If capital markets are unfavorable or Discovery Global's business deteriorates before separation, shareholders could end up with far less than the headline price.
Paramount eliminates that uncertainty entirely. Its whole-company offer means no spinoff, no debt allocation risk, and no dependence on Discovery Global's ability to access capital markets.
Ask Fintool AI AgentThe Sweeteners That Moved the Needle
Paramount's February 10 enhanced offer added billions in economic value without raising the headline price:
| Enhancement | Value | Purpose |
|---|---|---|
| Ticking Fee | $0.25/share/quarter ($650M) | Compensates for regulatory delays past Dec 31, 2026 |
| Netflix Break Fee Funding | $2.8B | Removes termination cost as obstacle |
| Debt Backstop | Up to $1.5B | Eliminates WBD's refinancing cost exposure |
| Bridge Loan Guarantee | $15B | Apollo/BofA/Citi step in if WBD lenders balk |
The ticking fee is particularly clever. If regulatory approval takes until Q2 2027, shareholders receive $30.50. If Q3 2027, $30.75. This directly addresses the board's stated concern that Paramount's deal could face a longer regulatory path than Netflix's.
Meanwhile, Paramount certified compliance with the DOJ's Second Request on February 9—commencing a 10-day waiting period. German foreign investment clearance was secured January 27. Netflix, whose streaming-plus-studio combination would create the #1 content company globally, faces more uncertain antitrust scrutiny.
Shareholder Pressure Building
The board isn't deliberating in a vacuum. Several institutional shareholders are pushing for engagement with Paramount:
Pentwater Capital Management and Ancora Holdings Group have publicly called on the board to explore the higher offer. While neither controls enough shares to force action alone, their vocal opposition to the Netflix deal creates headline risk and signals potential problems at the April shareholder vote.
The fundamental investor argument is simple math: Why accept $21-$27.75 (variable) when $30+ (certain) is available?
Ask Fintool AI AgentWhat the Board Must Weigh
WBD's directors face several competing considerations:
For reconsidering Paramount:
- $30 vs $21-$27.75 is a material premium
- Certainty of all-cash vs. variable consideration risk
- Paramount's regulatory progress (DOJ compliance achieved)
- Growing shareholder pressure
- Fiduciary duty to maximize value
For staying with Netflix:
- Board already unanimously approved the Netflix deal
- Netflix relationship established; Paramount hostile
- Discovery Global separation planning underway
- Reversing course invites litigation risk
- Netflix's streaming synergies may create long-term value
The Netflix merger agreement explicitly permits WBD's board to change its recommendation or terminate the deal if a "Company Superior Proposal" emerges—but only if WBD pays the $2.8 billion termination fee. Paramount's offer to fund that fee removes what would otherwise be a massive economic obstacle.
Market Reaction
WBD shares have been range-bound since the Netflix deal was announced, trading near the $27-$28 level—essentially pricing in Netflix's consideration with little premium for a Paramount switch:
| Stock | Friday Close | Change | 52-Week High | 52-Week Low |
|---|---|---|---|---|
| WBD | $27.99 | -0.4% | $30.00 | $7.52 |
| NFLX | $76.87 | +1.3% | $134.12 | $75.23 |
| PSKY | $10.32 | +0.5% | — | — |
Data via market data skill
The fact that WBD hasn't rallied toward Paramount's $30 offer suggests the market still sees meaningful probability that Netflix ultimately prevails. But that could change quickly if the board signals genuine engagement.
What Happens Next
Key dates ahead:
- March 2, 2026: Paramount's tender offer expires (likely to be extended)
- April 2026: Expected WBD shareholder meeting and vote
- Q3 2026: Discovery Global separation expected (if Netflix deal proceeds)
- March 4, 2027: Netflix deal outside date (with possible extensions)
If WBD's board decides to engage with Paramount, it would need to:
- Evaluate whether Paramount's offer constitutes a "Superior Proposal" under the merger agreement
- Notify Netflix and give them the opportunity to match (a "match right" period)
- If Netflix doesn't match, pay the $2.8 billion termination fee (funded by Paramount)
- Negotiate a definitive agreement with Paramount
This process takes weeks, not days. The board hasn't made any public statement about its deliberations, and WBD confirmed only that it received Paramount's amended offer and would "review it in accordance with its obligations under the Netflix merger agreement."
Ask Fintool AI AgentThe Bottom Line
For two months, WBD's board has defended the Netflix deal while rejecting Paramount's overtures four times. But the February 10 enhancements—the ticking fee, break fee funding, and debt backstop—appear to have opened a door.
The question is no longer whether Paramount's offer is superior on paper. It clearly is. The question is whether WBD's board will acknowledge that reality and re-engage, or whether they'll proceed to an April shareholder vote where institutional investors may force the issue.
David Zaslav and his board built the case for Netflix as a streaming partner that could unlock value from HBO, Max, and Warner Bros. studios. David Ellison and Larry Ellison—backed by a $43.3 billion personal guarantee—are making the case that $30 certain beats $27.75 variable, and that shareholders deserve the certainty.
With Bloomberg reporting the board is actively weighing its options, the streaming war's final chapter may be just beginning.