Netflix Gives Paramount One Last Chance In Warner Bros. Bidding War. All Three Stocks Climb.

The Warner Bros. Discovery acquisition saga took another turn Tuesday after the media giant said it will reopen talks with Paramount Skydance (PSKY) under a weeklong waiver from Netflix. The waiver lets Warner Bros. engage with Paramount to address “deficiencies” in its current proposal and allow the suitor to make its “best and final offer” ahead of an official shareholder vote in March.

Warner Bros. stock, Paramount and Netflix all rose Tuesday.

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Warner Bros. Discovery (WBD) on Tuesday announced that Netflix (NFLX) granted the company the waiver to reengage in negotiations with Paramount to clarify terms and discuss “unresolved deficiencies.” Warner Bros. also claimed that Paramount’s most recent bid was not its best offer. One Paramount representative reportedly informed a Warner Bros. board member that they would agree to pay $31 per share.

“Throughout the entire process, our sole focus has been on maximizing value and certainty for WBD shareholders,” CEO David Zaslav said. “We are engaging with PSKY now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WD shareholders through their best and final offer.”

The waiver discussions, which end Feb. 23, come ahead of a Warner Bros. shareholder vote on March 20 regarding the Netflix merger.

See IBD’s 3 Key Factors For Successful Stock Investing

Still, the Warner Bros. board unanimously recommended shareholders reject Paramount’s offer in favor of the Netflix merger.

Warner Bros. in December accepted Netflix’s proposed offer of $27.75 per share for the company’s movie studio and HBO streaming app, but without its cable TV channels including CNN or TNT. Paramount countered with $30 per share for the entirety of the company, as well as cover Warner Bros.’ breakup fee with Netflix, financing costs, and billions in backing from Oracle (ORCL) founder Larry Ellison.

“We continue to believe the Netflix merger is in the best interests of WBD shareholders due to the tremendous value it provides, our clear path to achieve regulatory approval ad the transaction’s protections for shareholders against downside risk,” said Samuel Di Piazza, Jr., chair of Warner Bros.’ board.

Warner Bros. And Paramount Rise

WBD shares advanced 2.7% Tuesday to rebound above its 50-day moving average, toward a 30 buy point for a flat base. The stock rallied late last year amid the bidding war and hit a three-year high in December.

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Paramount Skydance stock swung 4.9% higher Tuesday. Shares have unraveled 48% from its late September high of 20.86, which coincided with the start of reports it wanted to buy Warner Bros.

Netflix stock inched higher Tuesday. NFLX shares have also been on a nosedive stretching back to July, falling more than 40% over the past seven months.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison.

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