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Exclusive negotiations have commenced between Warner Bros Discovery and the streaming behemoth for a blockbuster acquisition of its core studio and streaming operations, a move that could dramatically alter the film and television landscape.

An Intense Bidding War

The leading streamer is reportedly vying with other industry titans like Paramount Skydance and the cable giant, which owns significant media properties, for ownership of the iconic Warner Bros studio, the premium HBO network, and the Max streaming platform.

Sources indicate the company has offered a hefty termination penalty of £3.7 billion should the deal fail to secure antitrust approval in the United States.

The Offer Picture

As the company's stock sitting around approximately $24 per share, its total market valuation stands at roughly $60bn. It is believed the bid on the table ranges from $28 and $30 per share, implying a total bid value in the range of $70bn to $75bn.

Industry experts have cautioned that such a merger could trigger major antitrust concerns, as it would unite two of the most dominant streaming services in the American market.

Assurances and Corporate Restructuring

As part of its bid, the streamer has provided assurances that the Warner Bros film studio, home to iconic series like Harry Potter and Batman, would retain wide theatrical releases.

Prior to any potential deal closing, Warner Bros Discovery is expected to complete a pre-arranged separation of its linear TV networks, which include CNN, TBS, and TNT.

An Entertainment Powerhouse

Should the deal proceed, Netflix would become the owner of HBO, the maker of critically acclaimed hits including Succession, The White Lotus, The Sopranos, and Game of Thrones, along with an vast archive of beloved TV series.

The studio officially began its auction last fall following overtures by multiple suitors.

Industry Concerns

The potential sale has not been without concern. Esteemed director James Cameron, known for Titanic and the Avatar series, recently warned that a Netflix acquisition could lead to a "catastrophic loss of long-term value" for the creative sector.

At first, Paramount Skydance had been considered the early favorite. It had also offered a $5bn breakup fee if approval issues.

Allegations of an Uneven Playing Field

This week, the rival bidder argued in a letter that its offer was the most likely to gain government approval. Additionally, the company accused the seller of running an "biased sales process" that unduly benefited Netflix, labeling it "tainted" in legal correspondence.

Officials from all companies involved refused to provide a statement on the ongoing negotiations.