Warner Bros Discovery has rejected Paramount Skydance's latest US$30-a-share hostile takeover bid, but is giving the Hollywood studio seven days to see if it can come up with a better deal to buy the owner of HBO Max and the "Harry Potter" franchise, Warner Bros said on Tuesday.

Paramount informally broached an even higher share price, US$31 a share, Warner Bros said, apparently enticing the board to the table. However, its response to Paramount still makes it clear that Warner Bros prefers the Netflix deal, ⁠and the odds of a switch are long.

The rival bidder has until February 23 to submit its "best and final offer," which Netflix is allowed to match under the terms of the merger agreement, Warner Bros said.

"Our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger," Warner Bros Chairman Samuel DiPiazza Jr and CEO David Zaslav said in a letter sent on Tuesday to the Paramount board.

"We continue to recommend and remain fully committed to our transaction with Netflix."

The two media giants have been vying for control of Warner Bros, its flagship film and TV studios and deep content library, in a contest that highlights the high stakes of a rapidly shifting entertainment landscape.

An unidentified Paramount financial advisor said their offer would be raised to US$31 a share if Warner Bros agreed to open negotiations, and they could go even higher, Warner Bros said in the letter, adding it now expects a best and final proposal to include a price above that amount.

"Time is running out for Paramount with this saga wrangling on, for way too long, which is in no one's interest," PP Foresight ⁠analyst Paolo Pescatore said. "For now the ball is in Paramount's court."

Shares of Paramount and Warner Bros Discovery rose about 2.5 percent in premarket trading.

Paramount's current offer for the ⁠whole company comes to US$108.4 billion, while Netflix is offering US$27.75 ⁠a share, or US$82.7 billion, just for its studio and streaming businesses. (Reuters)



Edited by Aaron Tam