NEW YORK CITY, New York: Warner Bros. Discovery is reopening takeover discussions with Skydance-owned Paramount for seven days after receiving a waiver from Netflix, even as it continues to recommend shareholders back its proposed merger with the streaming giant.

In a regulatory filing on February 17, Warner said Netflix granted it a limited waiver to revisit Paramount's "best and final" offer through February 23. The talks aim to address unresolved "deficiencies" and clarify terms in Paramount's latest bid.

Despite reopening discussions, Warner's board reiterated its support for the Netflix transaction. A special shareholder meeting to vote on that deal is scheduled for March 20.

Netflix expressed confidence in its agreement, saying it "provides superior value and certainty," while acknowledging "the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY's antics." The company added that it granted the waiver to "finally resolve this matter."

Paramount described Warner's move as "unusual," saying the board could have evaluated its offer without imposing a timed deadline. Nevertheless, Paramount said it was "nonetheless prepared to engage in good faith and constructive discussions."

The company confirmed it will continue advancing its all-cash tender offer of US$30 per share, which it argues is superior to Netflix's proposal, while also pursuing a proxy fight. Warner disclosed that Paramount indicated it would raise its bid to $31 per share "pending engagement."

The competing proposals differ significantly. In December, Netflix agreed to acquire Warner's studio and streaming operations for $72 billion in an all-cash deal, covering its legacy TV and movie production arms and HBO Max. Including debt, the enterprise value totals about $83 billion, or $27.75 per share, to be finalized after Warner spins off its cable networks.

Paramount, by contrast, seeks to acquire Warner in its entirety — including networks such as CNN and Discovery — with a hostile offer valued at $77.9 billion in equity, or $30 per share. Including debt, the enterprise value stands around $108 billion.

Raymond James analysts said they had "long believed" Paramount was willing to increase its offer and noted that a bid of $32 or $33 per share would make it "increasingly difficult to argue the Netflix agreement is superior," though Netflix could respond.

"Netflix is still in the driver's seat, but now having to make its case," the analysts wrote.

Paramount has also offered a "ticking fee" of 25 cents per share for each quarter after December 31 if its deal is delayed, and pledged to fund Warner's $2.8 billion breakup fee owed to Netflix under the merger agreement.

Regulators are reviewing both deals, with the U.S. Justice Department initiating scrutiny. Shares of Warner rose more than three percent on February 17, while Paramount gained over five percent and Netflix edged higher.