Warner Bros (WBD.US) fierce bidding war with Paramount (PSKY.US) as they increase their offer to $31 per share. Netflix (NFLX.US) facing an "overtime" situation.

Warner Bros. Discovery Company (WBD.US) said on Tuesday that Paramount Skydance Company (PSKY.US) has made a new acquisition offer of $31 per share, which may potentially be better than the existing agreement with Netflix (NFLX.US), sparking a new round of potential bidding war for the famous Hollywood production studio. According to a statement on Tuesday, Warner Bros. did not withdraw its proposal to support Netflix's $27.75 per share acquisition of its studio and HBO business. Instead, it stated that Paramount's latest terms have reached the threshold for further negotiations. Paramount's latest move indicates that the company, led by David Ellison, is not giving up its bid for Warner Bros. in the short term. This increased offer will test whether Netflix is willing to pay a higher price for Warner Bros.' production studio, including its DC Comics series and the library of "Game of Thrones." Warner Bros. stated, "The board has not yet made a decision on whether the revised Paramount proposal is superior to the merger with Netflix." The company plans to engage in further negotiations with Paramount and stated that if the board supports this increased offer, Netflix will have four days to respond. The board's decision comes after a seven-day deadline for Paramount to negotiate again with Warner Bros. Since September, Paramount has been seeking to acquire the parent company of HBO and CNN, raising its offer multiple times and modifying the terms requested by Warner Bros.' board. According to sources, the two companies were in negotiations until late last night, when they had to hang up the phone as the midnight discussion window closed. This left some unresolved issues, which can now be addressed by all parties. Paramount's revised proposal increased from the company's previous $30 per share offer by $1, valuing the deal at approximately $108 billion including debt. Netflix's proposal values the deal at $82.7 billion based on this basis, however Warner Bros. believes that separating its cable television networks will add additional value for its investors. Paramount's latest proposal includes a "ticking fee," which would pay 25 cents per share for each quarter of delay if the deal does not receive regulatory approval after September 30; if the transaction is rejected by regulators, Paramount will pay Warner Bros. $7 billion. Paramount also agreed that if any of its lending institutions have doubts about its ability to pay and refuse to fund the deal, it will contribute more equity. Paramount also will not back out of the deal citing the deterioration of Warner Bros.' cable television network business. After this announcement, Warner Bros.' stock price fell by less than 1% in after-hours trading, possibly because some investors were expecting more. Paramount and Netflix's stock prices both rose by about 1%. Paramount CEO Ellison launched a tender offer to acquire Warner Bros. stock in December, just days after Netflix's agreement was announced. This move followed Ellison's $8 billion acquisition of Paramount's parent company CBS and MTV in August last year. Facing pressure to merge due to declining revenues from traditional media businesses such as cable television and theaters, studios like Paramount and Warner Bros. are under pressure. After investing heavily in streaming services, the studios have focused on reducing production and layoffs to make these new businesses profitable. In October, Warner Bros. stated that it was considering all options after receiving interest from multiple parties. Paramount, Netflix, and Comcast Corporation Class A are all bidders interested in acquiring all or part of Warner Bros.' business. The bidding war has become tense, with Paramount accusing Warner Bros. of conducting a biased auction in favor of Netflix. Some Warner Bros. shareholders, including Pentwater Capital Management and Ancora Holdings, have publicly advocated for the company to restart negotiations with Paramount.