A source familiar with the matter informed Reuters that Paramount Skydance has submitted a higher offer for Warner Bros Discovery, intensifying efforts to disrupt the HBO Max owner's deal with Netflix.

The fierce bidding war for Hollywood's prized assets, encompassing franchises like "Harry Potter" and "Game of Thrones," has escalated the competition for dominance in the streaming market.

Paramount's enhanced bid, surpassing its initial offer of $108.4 billion, or $30 per share for the entire company, aims to address Warner Bros' concerns regarding the certainty of its financing, as per the source.

Details of how the bid was revised were not immediately available. Both Warner Bros and Paramount declined to comment, while Netflix was not reachable at the moment.

Warner Bros' preferred suitor, Netflix, had proposed to acquire the studios and streaming assets for $27.75 per share in cash, totaling $82.7 billion, and now has the opportunity to match Paramount's latest bid led by David Ellison.

A report by Variety on Monday suggested that Warner Bros is likely to review the Paramount offer while still recommending the Netflix deal to its shareholders.

Netflix, with substantial cash reserves, could potentially increase its offer for the HBO Max owner, whereas Paramount's competing bid is supported by Oracle billionaire Larry Ellison.

Following Warner Bros' rejection of an enhanced bid, Paramount was requested to submit its "best and final offer," which included covering a $2.8 billion termination fee to Netflix and introducing a quarterly "ticking fee" of 25 cents per share from the next year onwards to compensate Warner Bros shareholders for any deal closure delays.

Warner Bros had indicated that Paramount's offer on February 10 still fell short of what the board would consider a superior proposal and set a deadline until February 23 for a revised offer.

Analysts at MoffettNathanson had previously suggested that an offer around $34 per share from Paramount could potentially conclude the bidding war and prevent further debates on Discovery Global's value.

Warner Bros is planning to divest its cable TV assets, including CNN and HGTV, to Discovery Global, estimated to fetch between $1.33 and $6.86 per share, according to Warner Bros' projections.

Netflix argued that its offer provides Warner Bros shareholders with added value through the Discovery Global spinoff, which is anticipated to enhance the new company's strategic, operational, and financial flexibility.

Conversely, Paramount claimed that the cable spinoff integral to Netflix's offer holds little to no value.

Under pressure from activist investor Ancora Capital, Warner Bros, led by David Zaslav, faces scrutiny for its engagement with Paramount, with the investor threatening to oppose the Netflix deal if discussions with Paramount are not revisited.

Paramount's stock rose by 1.3% to $10.70 in after-hours trading.

Regulatory Review

Warner Bros shareholders are scheduled to vote on Netflix's offer on March 20, a critical moment in the high-stakes bidding war determining the future of Hollywood's iconic movie studios.

While investor approval would progress the deal, it will face rigorous scrutiny from U.S. and European competition authorities assessing the impact of merging Netflix's global streaming dominance with Warner Bros' century-old studio assets on competition and consumer choice.

A bipartisan group of lawmakers has expressed concerns regarding potential consumer and creative harm.

Paramount stated that it has already received foreign investment clearance in Germany and is in discussions with antitrust regulators in the U.S., EU, and UK, asserting a smoother path to regulatory approval compared to Netflix.

Paramount's bid aims to create a studio larger than industry leader Disney, merging two major TV operators, a move criticized by some Democratic senators who fear control over "almost everything Americans watch on TV."

Furthermore, the bid would transfer control of CNN to the conservative-leaning Ellisons, following their acquisition of CBS News and appointment of Bari Weiss as editor-in-chief.

A merger with HBO Max would position Netflix as the largest global streaming platform, boasting approximately half a billion subscribers.

Netflix's co-CEO Ted Sarandos expressed confidence in obtaining approval, emphasizing that their bid would benefit Hollywood by averting job cuts in an industry already impacted by production decreases and box-office uncertainties.

During negotiations, Netflix highlighted that combining its service with HBO Max would lower bundled offering costs for consumers, but it may face resistance from the Department of Justice regarding competition concerns with YouTube, America's top TV distributor.

As part of the regulatory review, the U.S. Department of Justice is investigating whether Netflix engaged in anti-competitive practices.

Netflix referenced Nielsen data indicating that Google's YouTube garners more viewing time on U.S. televisions than other streaming services.