Netflix granted Warner Bros. Discovery (WBD) a limited seven‑day waiver under the terms of its pending merger agreement, allowing WBD to engage in discussions with Paramount Skydance (PSKY) through February 23, 2026. The waiver gives WBD a brief window to address deficiencies in Paramount’s revised offer and to submit a “best and final” proposal while Netflix retains its contractual matching rights.
The waiver is part of a broader bidding war for WBD. Netflix’s $82.7 billion enterprise‑value acquisition of WBD’s studio and streaming assets is already under U.S. Department of Justice scrutiny, while Paramount’s competing all‑cash offer values the entire company at approximately $108.4 billion. Paramount has indicated a willingness to raise its bid above $31 per share and has offered to cover WBD’s $2.8 billion termination fee to Netflix, but the offer still covers the full company, including CNN and Discovery networks.
WBD’s board has remained steadfast in its recommendation of the Netflix merger, citing the value, a clearer regulatory path, and shareholder protections. The board’s letter to Paramount states, “Our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger. We continue to recommend and remain fully committed to our transaction with Netflix. [However], we welcome the opportunity to engage with you and expeditiously determine whether Paramount Skydance can deliver an actionable, binding proposal that provides superior value.” A shareholder vote on the Netflix merger is scheduled for March 20, 2026.
Netflix’s own commentary frames the waiver as a strategic move to keep options open. “Netflix has provided WBD a limited waiver under the terms of WBD’s merger agreement with Netflix, permitting WBD to engage in discussions with Paramount Skydance (“PSKY”) for a seven‑day period ending on February 23, 2026 to seek clarity for WBD stockholders and provide PSKY the ability to make its best and final offer,” the company said. “Together, Netflix and Warner Bros. will deliver more choice and greater value to audiences worldwide with expanded access to exceptional films and series – both at home and in theaters. Our transaction also expands production capacity and increases investment in original content, leading to long‑term job creation.”
The waiver allows WBD to evaluate Paramount’s offer while preserving Netflix’s right to match any subsequent bid, thereby maintaining a competitive balance. It also signals to investors that Netflix is prepared to defend its position but remains open to a potentially higher counter‑offer that could alter the valuation of the deal. The strategic implications extend beyond the immediate parties: the outcome will shape the future of content production, distribution, and regulatory oversight in the media industry.
The move underscores the high‑stakes nature of the Warner Bros. acquisition and highlights the complex interplay between competitive bidding, regulatory scrutiny, and shareholder interests in a rapidly consolidating media landscape.
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