The bidding war for Warner Bros. Discovery (WBD) between Paramount Skydance (PSKY) and Netflix (NFLX) will stretch into 2026, according to a report by Bloomberg late on Tuesday.
The report, citing people familiar with the company’s thinking, said Warner Bros.’ board isn’t planning to cancel the merger agreement signed last week with Netflix.
The report said shareholders of Warner Bros. are hoping for a bidding war that further boosts the price of the deal.
Paramount’s latest bid values the parent of HBO at $108.4B, including debt. Netflix is offering a mix of cash and stock for the Warner Bros. studios, streaming, and HBO businesses in a deal with an equity value of $72B.
Both companies have communicated that they have the ability to increase their offers, sources told Bloomberg. Paramount expects it will need to raise its offer in order to prevail, according to the sources. How high it goes will depend on a few factors beyond its control.
Paramount and Warner Bros. disagree over the value of the latter’s cable networks. Warner Bros. plans to spin off those networks into a separate company before selling to Netflix and is valuing that business at $3 to $4 a share. Paramount values them at just $1 a share, the report said.
Paramount has argued Netflix will face greater regulatory hurdles. Politicians and Hollywood labor unions have voiced concern about Netflix’s deal.
President Donald Trump has told advisers that Warner Bros. should sell to the highest bidder, while saying Netflix’s potential market share could be a problem. He also said a Paramount deal would have to be looked at. Jared Kushner, his son-in-law, is participating in the Paramount deal.