The Battle for Warner Bros. Discovery: Netflix and Paramount Lock Horns

The contest for control of Warner Bros. Discovery (WBD) has intensified into a high-stakes corporate drama, with streaming titan Netflix facing a formidable and newly fortified challenge from Paramount Skydance. Market focus has shifted to assessing which suitor possesses the greater likelihood of closing a deal and delivering superior long-term value.

In a significant escalation, Paramount Skydance has revised its hostile takeover bid for the entirety of Warner Bros. Discovery. The centerpiece of this enhanced offer is an irrevocable personal guarantee from Oracle co-founder Larry Ellison, backing the equity portion of the deal to the tune of $40.4 billion. This move directly addresses previous concerns from the WBD board regarding the financing certainty of Paramount's proposal.

Furthermore, Paramount has matched and raised the breakup fee to $5.8 billion, mirroring a provision from Netflix. The all-cash offer now stands at $30 per share for the complete company, a clear contrast to Netflix's asset-specific approach. Paramount has also extended the expiration date of its tender offer to WBD shareholders to January 21, 2026.

Netflix Secures Revised Financing Package

Amid this heightened competition, Netflix has fortified its own position. According to an SEC filing dated December 19, the company has secured an additional $25 billion in bank credit facilities. This capital is intended to support its planned acquisition of specific studio and streaming assets from WBD and replaces a portion of a previously committed $59 billion bridge financing arrangement.

The new financial structure consists of:
* A $5 billion revolving credit facility.
* A $10 billion "delayed-draw" term loan with a two-year maturity.
* A $10 billion "delayed-draw" term loan with a three-year maturity.

This leaves approximately $34 billion from the original bridge financing for syndication. Funds are earmarked for the cash portion of the purchase price, related transaction costs, and the refinancing of certain existing debts. Netflix's proposal values the targeted WBD assets at an enterprise value of $82.7 billion, equating to roughly $27.75 per WBD share.

Should investors sell immediately? Or is it worth buying Netflix?

Market Prices in the Bidding War

The financial markets are reacting swiftly to the increased uncertainty over which bid will prevail. While the WBD board continues to recommend the Netflix transaction, traders are pricing in the credible threat posed by Paramount's improved offer.

A snapshot of the market movements reveals:
* Netflix (NFLX): Shares traded slightly lower, down approximately 1%, in the range of $93.31 to $93.57.
* Paramount (PSKY): The stock advanced between 5% and 8% following the announcement of the Ellison guarantee.
* Warner Bros. Discovery (WBD): Gaining about 3%, driven by the intensified bidding competition.

These movements indicate that investors are weighing Paramount's enhanced financing security against the potential for a counter-bid from Netflix.

A Critical Timeline for Shareholders and Netflix

WBD shareholders now face a strategic choice: accept the immediately higher all-cash price from Paramount or side with their board's recommendation for the structurally more complex, but purportedly more value-creating, asset deal with Netflix. The board maintains that the Netflix transaction offers superior long-term prospects despite a lower immediate cash equivalent per share.

The calendar adds another layer of tension. Netflix is scheduled to release its next quarterly earnings on January 20, 2026—just one day before the Paramount offer expires on January 21. In this narrow window, Netflix's management must convincingly demonstrate both the financial soundness of the proposed WBD acquisition and the underlying strength of its core business to maintain its competitive stance in this unfolding takeover saga.