Warner Bros. deal hangs in balance as Paramount raises all-cash bid to $77.9B and DOJ scrutinizes Netflix
Feb 12, 2026
Key Points
- Paramount raises its all-cash bid for Warner Bros. Discovery to $77.9 billion and agrees to cover Netflix's $2.8 billion termination fee, seeking to block Netflix's $75 billion acquisition.
- Warner's board declines to change its Netflix recommendation despite Paramount's offer, citing high contractual barriers to reopening negotiations.
- The DOJ investigates Netflix for potential anticompetitive practices as part of merger review, while Trump says he won't personally intervene in the deal.
Summary
Paramount escalated its bid for Warner Bros. Discovery to $77.9 billion in all-cash Tuesday, attempting to derail Netflix's pending $75 billion acquisition of the studio and streaming assets. The move includes a commitment to cover Warner's $2.8 billion termination fee to Netflix, plus a ticking fee of 25 cents per share each quarter the deal remains unsigned.
Unlike Netflix, which plans to acquire only Warner's film and TV studios and HBO Max, Paramount also intends to buy Warner's cable networks—CNN, TVS, and Food Network—making it the only viable buyer for the entire combined entity.
Warner's board agreed to review the offer but declined to change its recommendation in favor of the Netflix deal. The bar for Warner to reopen negotiations is extremely high given contractual obligations; the company advised shareholders to take no action on Paramount's tender offer. Analysts at Raymond James expect Paramount and its backers to raise the bid further, with some expecting an increase of $2 to $3 per share above the current $30-per-share offer.
A Cleveland investor via Cora Holdings acquired a small stake in Warner with plans to increase holdings and pressure the company toward negotiation, adding pressure from shareholder activism.
Meanwhile, Netflix and Warner are advancing regulatory approval from the DOJ and European authorities. The DOJ is investigating whether Netflix has engaged in anticompetitive practices as part of the merger review. President Trump reversed his earlier concerns about the deal's competitive scale, saying last week he would not personally weigh in and would leave the decision to the Justice Department.
Paramount's stock fell 7 percent Tuesday, with market reaction tied to the added financial burden of the breakup fee rather than confidence in the bid's success. The deal dynamics now center on whether Netflix will raise its offer in response, and whether Paramount can convince shareholders that a higher bid is worth the financial strain.