Netflix is in exclusive talks to buy Warner Bros Discovery's film and television studios along with its streaming assets after offering $28 per share, a source with direct knowledge of the matter said.
The parent of HBO, which has been exploring strategic options, received a second round of bids this week after Netflix, Paramount Skydance and Comcast made preliminary buyout proposals.
Netflix, which emerged as the top bidder, made a mostly cash offer, Reuters has previously reported.
The $28 per share offer compares with Warner Bros' closing price of $24.54 on Thursday and a previous offer from Paramount of nearly $24 for all of the company's assets that also include cable networks such as CNN, TNT and TBS.
Netflix and Warner Bros Discovery did not immediately respond to Reuters requests for comment.
Strategic pivot
Netflix is aggressively diversifying beyond its core subscription model to drive new revenue streams.
A deal with Warner Bros, whose franchises include Harry Potter, Game of Thrones and DC Comics, would transform Netflix into a vertically integrated media powerhouse, giving it one of Hollywood's most valuable libraries.
Netflix would gain exclusive long-term control over premium intellectual property while reducing its reliance on external studios as it expands into gaming, live entertainment and broader consumer ecosystems.
Bloomberg News reported Netflix has offered a $5 billion breakup fee if regulators block the deal and that the companies could announce the agreement within days.
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The news of a potential deal has prompted a consortium of leading film industry figures to urge the US Congress to intervene if Netflix's bid succeeds, warning of a looming economic and institutional crisis in Hollywood, Variety reported.
Paramount has accused Warner Bros of running an unfair sale process that favors Netflix over other bidders, CNBC reported on Thursday, citing a letter sent by its newly merged media company.
"We strongly urge you to empower such a special committee comprised of directors with no potential appearance of bias or beholdenness to others whose interests may differ from those of the stockholders," Paramount's legal team was quoted as saying in the letter.
Paramount did not immediately respond to Reuters' requests for comment.
In October, the Warner Bros board turned down a roughly $60 billion bid from Paramount for the entire company and subsequently launched a formal sales process for its assets.
