New York, February 28, 2026, 15:21 (EST) — Market closed
- Warner Bros. Discovery’s Series A shares slipped 2.2% to end Friday at $28.17.
- Paramount Skydance has struck a deal to acquire WBD at $31 per share in cash, yet the spread on the transaction is still notably wide.
- Attention shifts to approval risk, with financing questions and upcoming disclosures and calls next up for traders.
Shares of Warner Bros. Discovery (WBD) finished Friday at $28.17, slipping 2.2%. They moved in a range from $28.12 to $28.40 over the session. At this level, WBD remains roughly 9% under Paramount Skydance’s $31-a-share all-cash offer, a deal the companies have valued at $110 billion. 1
U.S. markets are closed for the weekend, leaving WBD stock to enter Monday mainly as a deal trade, with the media turnaround angle taking a back seat. If the tie-up goes through, it creates another big player in a sector squeezed by streaming expenses and the ongoing decline of cable TV.
The difference between the cash bid and where shares closed Friday says a lot about how the market is pricing timing and risk. For merger arbitrage players—those snapping up targets at a discount to the offer—the spread grows if regulators balk, the deal drags out, or funding tightens.
Netflix won’t bump up its bid for pieces of Warner to match Paramount’s offer. Co-CEOs Ted Sarandos and Greg Peters said the company’s bid at that level “no longer financially attractive.” 2
Wall Street responded positively to the disciplined approach. Netflix shares jumped almost 14% Friday, with Paramount Skydance soaring close to 21%. According to Reuters, Paramount has agreed to take on the $2.8 billion breakup fee that Warner owed Netflix. Valuation-wise, LSEG’s estimates value the deal at around 13 times Warner’s projected EBITDA—earnings before interest, taxes, depreciation, and amortization. Ben Barringer of Quilter Cheviot said leadership must show “an ability to not overpay.” 3
Warner executives described it as the final act, not a fresh start. During a global townhall, chief revenue and strategy officer Bruce Campbell told employees Netflix walked away, “resulting in a signed agreement” with Paramount. California Attorney General Rob Bonta weighed in, saying the state’s investigation would be “vigorous.” 4
Raymond James cut its rating on WBD, dropping the stock to Underperform from Outperform on Friday. Analyst Ric Prentiss argued that with Netflix out of the running, any shot at a higher offer is probably off the table, turning WBD into what he called a “traditional arbitrage spread” play. 5
The agreement comes on the heels of Warner’s Thursday earnings report, which underscored the company’s patchy business profile. Fourth-quarter revenue dropped 6% to $9.46 billion. Global streaming subscribers climbed to 131.6 million. Gross debt stood at $33.5 billion at the close of 2025, with cash at $4.6 billion. 6
Still, a deal of this scale isn’t quick. Approvals dragging out can keep the spread wide, and as timelines move, WBD shares may edge down with deal traders recalculating both odds and timing.
Then there’s execution, always a risk. The major content players have to bankroll shows, sports rights, and movies, all while handling their debt loads. Investors are eyeing whether the acquirer can hold financing and deadlines in line—without putting too much pressure on the actual business.
Paramount and Warner are targeting a third-quarter 2026 closing, with WBD shareholders slated to vote in early spring. Should the deal drag past September 30, 2026, WBD shareholders get a 25-cent-per-share-per-quarter ticking fee, piling up until the merger is done. WBD chief David Zaslav said the focus was to “maximize the value” and offer “as much certainty as possible.” Paramount has a conference call lined up for Monday, March 2, at 8:30 a.m. ET — that’s the next major event for WBD shares as markets open. 7
