NEW YORK – Netflix (NFLX.O) is preparing an all-cash offer for Warner Bros Discovery’s (WBD.O) studios and streaming businesses, a source familiar with the matter told Reuters on Tuesday. The move is intended to expedite the sale, which has faced both regulatory hurdles and opposition from politicians and rival bidder Paramount Skydance (PSKY.O).

The news was first reported by Bloomberg earlier in the day. Netflix declined to comment on the Bloomberg report, while Warner Bros did not immediately respond to Reuters’ request for comment.

Stock Market Reaction

Following the announcement, Netflix shares rose 1.02%, while Warner Bros Discovery shares increased 1.62%, reflecting investor optimism that Netflix’s bid could prevail. Paramount’s shares remained largely flat.

Details of the Bidding War

Netflix’s initial $82.7 billion deal combined cash and stock for Warner Bros’ film and streaming assets, whereas Paramount offered $108.4 billion in cash for the entire company, including its cable television operations.

Despite Paramount’s higher bid, Warner Bros has signaled a preference for Netflix’s offer. The board cited debt risk in Paramount’s proposal, which relies heavily on financing, and described the offer as “inadequate” in comparison to Netflix’s all-cash terms. Paramount amended its bid with $40 billion in equity backing from Oracle co-founder Larry Ellison and David Ellison, father of Paramount’s CEO, but Warner Bros has remained cautious.

Termination Fees and Regulatory Risks

As part of the deal structure, Netflix would be liable for a $5.8 billion termination fee if the company cannot obtain regulatory approval, while Warner Bros would owe $2.8 billion to Netflix if it abandons the agreement. Paramount has argued that its $30 per share cash offer is superior to Netflix’s previous $27.75 per share cash-and-stock deal, claiming it would more easily clear regulatory hurdles.

Strategic Importance of Warner Bros

Warner Bros’ film and television studios and extensive content library are highly coveted assets in the evolving entertainment landscape. Its portfolio includes franchises such as Harry Potter, Game of Thrones, Friends, and the DC Comics universe, as well as classic films like Casablanca and Citizen Kane.

The competition between Netflix and Paramount underscores the growing importance of streaming platforms and intellectual property in a market where theatrical revenues are volatile, and media consolidation concerns are rising among policymakers. Lawmakers across the political spectrum have warned that further consolidation could drive up subscription prices and reduce consumer choice.

Paramount’s Legal Action

On Monday, Paramount filed a lawsuit seeking more information on Warner Bros’ deal with Netflix and announced plans to nominate directors to Warner Bros’ board, signaling an intensifying corporate battle for control of Hollywood’s prized content libraries.