Warner Bros provides Paramount every week to make its ‘finest and closing supply’ in takeover battle with Netflix

Warner Bros Discovery has reopened sale talks with Paramount and given it seven days to make an offer that would beat a deal secured with Netflix.

The studio behind films like Harry Potter and Barbie told Paramount to make its ‘best and final offer’. 

The board of Warner Bros had already backed the £60billion takeover by Netflix last year, before Paramount tried to hijack the deal. 

Last week, Paramount tried to sweeten the deal by offering to pay the £2billion breakup fee that Warner Bros would have to pay Netflix if it terminates the agreed deal. 

Now it has been reported that Paramount could bump up its offer from an equivalent of around £80billion to £84billion for the whole company – in a bid to thwart Netflix.

The deal would include its cable TV channels such as CNN and TNT Sports and the Discovery+ streaming service.

Paramount has until February 23 to submit its final offer, which Netflix is then allowed to match, Warner Bros said.

Paramount and Netflix are vying for Warner Bros, which is behind films such as Barbie

In a letter to the Paramount board, the bosses of Warner Bros – chairman Samuel A. Di Piazza Jr and president David Zaslav – said: ‘We seek your best and final proposal.  To be clear, our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger.’ 

They said a Paramount banker had told a Warner Bros board member that it would offer at least $31 a share if the company agreed to reopen talks – an increase from its previous offer of $30 per share.

And a new proposal is likely to include a price ‘higher than $31,’ the letter added.

But Warner Bros said its board still unanimously recommends that investors back the Netflix sale – which is worth $27.75 per share.

Investors will vote on the Netflix deal at a meeting on March 20. 

Paramount, which is behind films including The Godfather and Top Gun, as well as TV shows such as Landman and Tulsa King, this month sweetened its offer.

It said it will cover the £2billion breakup fee that Warner Bros would have to pay Netflix if it terminates its agreed deal with the streaming giant. It has also added a so-called ‘ticking fee’ of £485million if completion of the deal drags on.

It is the latest twist in the blockbuster takeover battle and could see a fierce bidding war between Netflix and Paramount.

In a statement, Netflix said it granted Warner Bros a seven-day waiver to engage with Paramount to ‘fully and finally resolve this matter.’

It said that Paramount’s ‘antics’ were an ‘ongoing distraction for WBD stockholders and the broader entertainment industry.’

‘The Netflix transaction is centered on growth, opportunity, and a reinforced commitment to creating world-class films and television – not consolidation and layoffs,’ it added.

And Netflix said it was confident its merger would be approved in a ‘timely’ way by regulators – whereas Paramount had been ‘misleading [Warner] shareholders about the real risk of their regulatory challenges around the world.’

Netflix is seeking to build an unassailable position in streaming with its own hits, including Bridgerton and Squid Game.

Dan Coatsworth, head of markets at AJ Bell, said: ‘Both Paramount and Netflix have been doing the takeover dance, but the endless twists and turns have kept the audience guessing as to who will win the prize, if anyone at all.’

He said Paramount now has one week ‘to dig as deep as it can or go away.’

But Netflix still appears to be the favourite and ‘any extra money from Paramount might still not be enough to switch allegiance,’ Coatsworth said.