Warner Bros. officially deems Paramount’s bid ‘superior,’ and Netflix withdraws

In a statement Thursday, Warner Bros. Discovery said its board concluded that Paramount’s revised all‑cash offer to buy the entire company qualifies as a “company superior proposal” under the terms of its merger agreement with Netflix. The bid values Warner Bros. Discovery at around $111 billion, or $31 a share, up from Paramount’s earlier $30‑per-share proposal and well above the economics of Netflix’s $83‑billion pact announced in December.

Warner Bros. Discovery notified Netflix that Paramount’s offer is now deemed superior, formally triggering a contractual window during which Netflix could submit changes to its deal in an attempt to reclaim that status.

Richer price, heavier protections

Paramount’s bid stands out not just on headline price but on the protections it has offered to reassure Warner Bros. Discovery and its investors. The package includes a $7 billion reverse termination fee if regulators block the transaction, a commitment to pay Warner Bros. Discovery’s multibillion‑dollar breakup fee owed to Netflix if that agreement is terminated, and a “ticking fee” of 25 cents per share per quarter if closing drags beyond the fall.

Paramount has also stripped away earlier conditions tied to the performance of Warner Bros. Discovery’s cable portfolio and pledged to inject additional equity if needed to satisfy lenders, moves intended to reduce execution risk. Backed by David Ellison and a financing package combining roughly $45 billion to $46 billion in equity with more than $57 billion of debt, the bid represents an aggressive push to seize one of Hollywood’s crown jewel studios outright.

Netflix investors had expressed concern about the size, strategic fit, and regulatory overhang of the Warner Bros. Discovery transaction. Seen by the market as a “deal stock,” as S&P Global’s Melissa Otto previously told Fortune, Netflix stock has actually been trading up since Paramount raised its bid, as investors cheered the prospect of Netflix losing the deal and not saddling itself with legacy Hollywood assets.

Regulatory risk looms large over Paramount’s offer, structured as a more traditional studio‑and‑networks consolidation, but it would still create a media giant that rivals Disney and Comcast’s NBCUniversal in scale.

The battle has also attracted political attention, with President Donald Trump at first saying he would be involved while praising Netflix co-CEO Ted Sarandos as a “fantastic man,” then saying he wouldn’t be involved, and expressing anger over stray comments made by former Obama official and Netflix board member Susan Rice. The Ellison family, meanwhile, is reportedly close to Trump at the moment, although he insisted in December that he would hate to see his enemies if the Ellisons are to be considered his friends.

Update, Feb. 26, 2026: This report has been updated with news of Netflix’s withdrawal.