Netflix grants Warner Bros seven-day waiver to reopen Paramount Skydance deal talks

Netflix, Warner Bros. gave Discovery a seven-day exemption to restart talks with Paramount Skydance; This has added new volatility to the high-stakes fight for one of Hollywood’s most valuable broadcast, studio and cable assets.

The interim authorization, valid through February 23, 2026, allows WBD to contact Paramount Skydance directly to address what it describes as unresolved “deficiencies” in Paramount’s hostile bid, although WBD continues to recommend its pending transaction with Netflix. The company also said Tuesday that it will hold a special shareholders’ meeting on March 20.

Netflix gives WBD narrow window to test Paramount’s bid

Warner Bros. In a statement, Discovery confirmed that Netflix had agreed to loosen restrictions under the merger agreement, allowing WBD to engage in talks with Paramount Skydance for a limited period of time.

Warner Bros. “Netflix has granted WBD a limited waiver under the terms of WBD’s merger agreement with Netflix, allowing WBD to engage in discussions with Paramount Skydance for a seven-day period ending February 23, 2026, to provide clarity to WBD shareholders and the ability to make PSKY its best and final offer,” Discovery said in a statement.

“During this period, WBD will contact PSKY to discuss unresolved deficiencies and clarify the specific terms of PSKY’s proposed merger agreement,” the statement said.

Netflix’s waiver comes as Paramount continues to make its case directly to shareholders, bypassing the WBD board in a hostile tender offer. After Paramount lost a bidding contest against Netflix for WBD’s streaming and studio assets, Warner Bros. He is offering $30 per share, all cash, for Discovery.

Paramount signals it may increase its offer to $31 per share

Although Paramount publicly insisted that its $30-per-share offer was not “best and final,” the company reportedly stopped short of officially raising the headline price. CNBC.

Warner Bros. Discovery rejected Paramount Skydance’s (PSKY) latest $30-per-share buyout offer, the company said Tuesday (Feb. 17), but gave the Hollywood studio seven days to propose a more suitable deal to acquire HBO Max and the owner of the “Harry Potter” franchise.

WBD said Tuesday that a senior Paramount representative had privately indicated it would pay $31 per share if talks were restarted.

This maneuver puts Paramount in a position to strengthen its bid without admitting that it had previously failed to offer terms acceptable to WBD’s board. This also increases pressure on Netflix, whose current offer for WBD’s streaming and studio businesses is $27.75 per share, all cash.

Zaslav says WBD focuses on ‘value and accuracy’

David Zaslav, WBD’s chief executive, framed the renewed talks as an exercise in accountability to shareholders rather than a change in the company’s advice.

“Our sole focus throughout the entire process has been to maximize value and certainty for WBD shareholders,” WBD CEO David Zaslav said in a statement. “Every step of the way, we have provided PSKY with clear guidance on the deficiencies in their proposal and opportunities to address them. We are now consulting with PSKY to determine whether they can submit an actionable, binding proposal that provides superior value and certainty to WBD shareholders through their best and final offer.”

WBD also emphasized that the disclaimer is limited. After February 23, Netflix will retain matching rights under the merger agreement, a contractual mechanism that allows Netflix to respond with improved terms if WBD decides Paramount’s offer is superior.

Ted Sarandos: Paramount is ‘throwing the region into confusion’

Netflix co-chairman Ted Sarandos said the disclaimer was designed to eliminate uncertainty, arguing that Paramount’s public campaign distorted the process.

“Paramount was making a ton of noise, including publicly announcing all these hypothetical offers, talking directly to shareholders, and bypassing the Warner Bros. Discovery board, filling the area with confusion for shareholders,” Sarandos said. “So we’ve given these shareholders the opportunity to get exactly what they deserve, which is complete clarity and certainty.”

Sarandos declined to discuss how much Netflix could increase its offer if Paramount comes back with a stronger offer.

“I don’t want to go into hypotheticals,” he said. “Let them make their move, and then we’ll see where the next step takes us.”

Paramount says it’s ready to operate in “good faith”

Paramount responded by acknowledging WBD’s announcement and reaffirming its belief that its offer was superior to the Netflix transaction.

“While the board’s actions are unusual, Paramount nevertheless stands ready to engage in good faith and constructive discussions,” Paramount said.

However, Paramount signaled that it would not stop its pressure tactics. The company said it would proceed with the tender offer and maintain its intention to appoint directors to WBD’s board of directors at the annual meeting.

WBD is holding a special shareholders’ meeting on March 20

Warner Bros. Discovery said it would hold a special shareholders meeting on March 20 and reiterated that its board continues to unanimously recommend the Netflix deal over Paramount’s offer.

Netflix described the meeting date as an important signal for its transaction.

“While we are confident that our transaction delivers superior value and certainty, we recognize that PSKY’s antics are an ongoing distraction for WBD shareholders and the entertainment industry more broadly,” Netflix said. “Accordingly, we have granted WBD a narrow seven-day waiver of certain obligations under our merger agreement within which to fully and finally resolve this matter with PSKY.”

Warner Bros. Discovery’s shares rose about 3 percent on Tuesday, while Paramount shares gained about 5 percent.

Regulatory reviews weigh in on both Netflix and Paramount recommendations

Despite the rising numbers, no proposal offers a clean path. Both potential transactions are expected to face intense regulatory scrutiny, and the question of which deal is more viable could be as important as the headline price.

Industry insiders and lawmakers have expressed concern that the Netflix-WBD combination could bring together the two most powerful streaming services, potentially limiting consumer choice and contributing to price increases.

Netflix argued that its deal would protect jobs and stabilize the media industry, which has been hit by restructuring and layoffs.

Paramount, meanwhile, has touted its proposal as not only financially superior but also more likely to win government approval. But the proposal carries its own challenges, including antitrust concerns about merging two major movie studios and their extensive pay television channel portfolios.

Foreign funding becomes flashpoint in Paramount bid

Paramount’s bid is partly financed by sovereign wealth funds in Saudi Arabia, Abu Dhabi in the United Arab Emirates and Qatar. Paramount said those investors would have no management rights, but Netflix raised the possibility of further scrutiny.

Netflix said it expects the structure to attract the attention of regulators, including the Committee on Foreign Investment in the United States.

He also warned that European officials may closely examine the role of Middle Eastern investors.

Given Europe’s record of aggressive antitrust enforcement, the region could be decisive for either deal, even if the U.S. political stance remains unclear.

President Donald Trump has said he is not involved in the process and does not plan to be, but he has reportedly met with executives from both parties.

Sarandos rejected Paramount’s claims that it had a smoother editing path.

“PSKY does not have a faster way to regulate,” Sarandos told CNBC on Tuesday. “I don’t know why the Ellisons are implying they have inside access to the Justice Department, but I can assure you they don’t. And in terms of our legislation [position] “We are organizations that all players in Europe know and trust, in Europe and around the world.”