Warner Bros. Rejects Paramount's Offer—How It Affects WBD, NFLX, PSKY

Key Points

• Warner Bros. Discovery rose more than 170% in 2025, leading S&P 500 communications stocks.
• Following the Warner Bros.-Netflix deal, Paramount Skydance is continuing to pursue Warner Bros.
• However, WBD isn't budging. See what its latest rejection of PSKY's offer means for all three stocks.

Shares of entertainment giant Warner Bros. Discovery NASDAQ: WBD had a landmark year in 2025. They rose approximately 173%, ending the year as the best-performing communications stock in the S&P 500 Index.

The battle to purchase Warner Bros. was by far the dominant driver of the stock’s performance. Warner Bros. and Netflix NASDAQ: NFLX reached a deal in December, when the streaming leader agreed to buy most of WBD for an enterprise value of around $82.7 billion.

However, Paramount Skydance NASDAQ: PSKY has continued to fight, recently offering to buy all of WBD at an enterprise value of $108.4 billion. Despite Oracle NYSE: ORCL founder Larry Ellison backstopping the proposal, Warner Bros. told shareholders to reject the offer.

Below, we’ll break down what this development means for all three stocks. 

WBD Could Benefit From Renewed Bidding War

For Warner Bros. Discovery, little changes at this time. The company is continuing with its plan to sell its streaming, television, and movie production assets to Netflix.

WBD will also spin out its cable TV channels into Discovery Global, with WBD owners receiving new Discovery Global shares after the deal closes. 

Netflix’s share price before closing will influence the value that WBD shareholders receive. This, and the price at which markets value Discovery Global, will determine the total value that WBD shareholders receive.

A likely estimate of the total value that will be received falls between $28 and $33 per share.

Currently, Paramount’s offer is all cash at $30 per share for the entirety of WBD. It is not contingent on Paramount’s share price and does not require a cable channel spin-off.

Warner Bros. indicated that a deal with Paramount is still possible, but only if the company raises its price. This creates potential for a renewed bidding war, which could send WBD shares higher. On Jan. 8, Paramount Skydance reaffirmed its $30 offer; however, it is possible that this could change.

NFLX Hopes the Status Quo Remains

Netflix remains in the driver’s seat when it comes to buying WBD. The deal has clear benefits to Netflix, including greatly increasing its share of the TV streaming market and controlling valuable intellectual property.

However, according to Bloomberg Intelligence estimates, Netflix would also have to add $60 billion in debt. In addition to financing risks, this deal will likely face significant antitrust scrutiny, which could impact its potential for regulatory approval.

So far, markets have had a decidedly negative reaction to the deal. Since the official announcement on Dec. 5, 2025, Netflix shares are down nearly 10% as of the Jan. 8 close. Still, the long-term benefits to Netflix could be huge if the deal closes and it successfully integrates the two firms.

Another bidding war would be directly opposed to Netflix’s interests, as it could result in the company paying more for the agreement than originally agreed. However, WBD seems firmly committed, and it's hard to say how much more Paramount would raise its bid, if at all.

PSKY Must Pony-Up to Win WBD

Paramount Skydance is currently attempting a hostile takeover of WBD, directly asking WBD owners to sell their shares to them. Formally speaking, PSKY wants WBD owners to “tender” their shares.

If WBD owners tender the majority of the company’s shares, Paramount could force WBD into its deal. Warner Bros. recommended that shareholders do not tender their stock to Paramount. Though unlikely, WBD shareholders could decide to go against this recommendation and tender their shares anyway. 

There are around 2.6 billion WBD shares. Shareholders would need to tender more than half of these to PSYK for its takeover to succeed. According to Bloomberg Intelligence analyst Geetha Ranganathan, investors have only actually tendered around 500,000 shares.

Thus, Paramount is nowhere near the threshold it needs. At this point, it seems the firm’s only real chance to acquire WBD is by increasing its bid. Ranganathan suggests that WBD is seeking a $34 per share bid to change its mind.

Could WBD Gain Another 20%?

Should a new bidding war ensue, the stock that stands to benefit the most is WBD. For reference, a $34 per share offer would represent a 20% premium over WBD’s Jan. 8 closing price of $28.32. Notably, the highest price target on WBD, which comes from Arete Research, is $35. This target implies that at least one expert believes that the bidding war could continue and drive WBD stock price higher.