Paramount Skydance submitted a higher offer for Warner Bros Discovery, a source familiar with the matter told Reuters on Monday, ratcheting up efforts to derail the HBO Max owner's deal with Netflix.
The bidding war for one of Hollywood's most coveted assets including the "Harry Potter" and "Game of Thrones" franchises has raised the stakes for dominance in the streaming-led market.
Paramount's new bid — which improves its initial offer of $108.4 billion, or $30 a share, for the whole company — seeks to address Warner Bros' concerns about the certainty of its financing, the source said.
Reuters could not immediately determine how the bid was revised. Warner Bros and Paramount declined to comment, and Netflix could not immediately be reached.
Warner Bros' chosen suitor Netflix, which offered to buy the studios and streaming assets for $27.75 a share in cash, or $82.7 billion, is allowed to match the latest bid from David Ellison-led Paramount.
Netflix has ample cash and could bump its offer for the HBO Max owner, while Oracle billionaire Larry Ellison backs Paramount’s rival bid.
The CBS parent was asked to submit its "best and final offer" after Warner Bros rejected an enhanced bid that included paying the $2.8 billion in termination fee to Netflix and adding a 25-cent per share quarterly "ticking fee" from next year to compensate Warner Bros' shareholders for any delay in deal closure.
Warner Bros had said Paramount's Feb. 10 offer still falls short of what its board would consider a superior proposal and gave a seven-day deadline until Monday to submit a revised offer.
MoffettNathanson analysts had earlier said that an offer in the range of $34 a share from Paramount would end the bidding war and "avoid further debate over Discovery Global's value."
Warner Bros' plans to spin off Discovery Global, which holds cable TV assets such as CNN and HGTV, could fetch between $1.33 and $6.86 a share, according to Warner Bros estimates.
Netflix said its offer gives Warner Bros shareholders added upside from the Discovery Global spinoff, which WBD argues will add value by giving the new company greater strategic, operational and financial flexibility.
However, Paramount has said the cable spinoff central to the streaming giant's offer is effectively worthless.
The David Zaslav-led Warner Bros came under pressure from Ancora Capital after the activist investor built a roughly $200 million stake in the HBO owner and accused the company of failing to adequately engage with Paramount.
The investor warned that if Warner Bros refuses to re-enter discussions with Paramount, it will vote against the Netflix deal and hold the company's board accountable during its annual meeting.
Warner Bros shareholders were set to decide the fate of Netflix's offer on March 20, with the vote expected to be a pivotal moment in the high-stakes bidding war to seal the future of one of Hollywood's most iconic movie studios.
A green light from investors would move the deal forward, but it would still face intense scrutiny from U.S. and European competition authorities, who must assess whether combining Netflix's global streaming power with Warner Bros' century-old studio assets would reduce competition or limit consumer choice.
A bipartisan array of lawmakers has raised concerns about the potential harm for consumers and creatives.
Paramount said it has already secured foreign-investment clearance in Germany and is in talks with antitrust regulators in the U.S., the European Union and the U.K. Paramount has repeatedly argued it has a clearer path to regulatory approval than Netflix.
Paramount's bid will create a studio larger than market leader Disney and fuse two major TV operators, which some Democrat senators say will control "almost everything Americans watch on TV."
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