Warner Bros. Discovery hopes to hear a "best and final offer" from Paramount and reopen a short window for potential bid negotiations; at the same time, the company is still advancing its merger with Netflix and urging shareholders to reject Paramount's current hostile takeover bid. If it sounds complicated, that's because it is.

Warner Bros. Discovery is worth tens of billions of dollars, and the company's board of directors is trying to secure the highest possible offer from any potential acquirer.

Therefore, on Tuesday morning local time, Warner Bros. Discovery stated that it would reopen negotiations with Paramount to seek a higher acquisition price, while also acknowledging that Netflix can and is likely to match this offer.

Paramount responded Tuesday afternoon that it welcomed "good faith and constructive discussions."

Netflix strongly criticized Paramount on Tuesday, saying that Paramount's "financing challenges and rapid deleveraging plans pose significant risks to the entire entertainment industry."

In December, Warner Bros. Discovery agreed to sell most of the company's assets, including the Warner Bros. film studio and HBO, to Netflix. Warner Bros. Discovery's cable channel assets, including CNN, are not part of the sale.

The deal with Netflix was also equivalent to rejecting Paramount's acquisition intention at the time. But the Paramount CEO then made a $30-per-share block offer directly to shareholders, with the goal of acquiring the entire Warner Bros. Discovery company, including the CNN assets.

That's the very offer Warner Bros. Discovery is now officially opposed to. The company said on Tuesday morning local time that it would hold a special shareholders' meeting on March 20 and recommend that shareholders vote to approve the transaction with Netflix. The deal values ​​the production and streaming assets at $27.75 per share.

Warner Bros. Discovery said that selling assets to Netflix and spinning off to establish a new company called Discovery Global to carry cable channel assets is currently the best solution for investors; the company also called Paramount's proposal too risky and similar to a highly leveraged acquisition.

But one big unknown remains: What exactly is Paramount's "best and final offer"?

In M&A negotiation terms, that means the highest price a buyer is willing to pay, and Paramount has yet to officially give an answer.

During last year's first-round bidding war for Warner Bros. Discovery, Paramount signaled it was willing to pay more than $30 a share. According to Warner Bros. Discovery, a person representing Paramount told Warner board members last week that Paramount was willing to increase its offer to $31 per share if the two parties entered into formal negotiations.

The person also reserved room to further raise the offer, saying that $31 was not the final bid.

Despite the merger agreement, Netflix has given Warner Bros. Discovery a seven-day limited exemption period to engage and negotiate with Paramount.

"We want to see your best and final offer," Warner Bros. Discovery wrote in a letter to Paramount's board of directors on Tuesday.

Although the entire letter is full of financial and legal jargon, the core message can be summarized as: either make a final good faith offer, or give up.

Paramount responded on Tuesday afternoon, calling the Warner board's move "unusual" but saying it "remains prepared to engage in good faith and constructive discussions."

Paramount also said it will continue to move forward with its tender offer, continue to oppose the "less favorable Netflix merger proposal" and plans to nominate a full slate of director candidates at the upcoming Warner Bros. Discovery annual shareholder meeting.

Paramount has revised the terms of the acquisition last week, slightly raising the terms of the acquisition and moving closer to Warner.

Now in talks with Paramount, it could secure more cash for Warner Bros. Discovery. Just a year ago, before rumors of a sale emerged, the company was trading at less than $10 a share.

Warner Bros. Discovery CEO said in a press release that the company has remained focused on maximizing value and certainty for shareholders throughout this process. He said that the company has clearly pointed out the flaws and areas for improvement in its offer to Paramount at every stage, and the current contact is to confirm whether Paramount can submit a final offer that is binding, enforceable, and brings greater value and certainty to shareholders.

Paramount has already filed a lawsuit in connection with this merger battle, so Warner Bros. Discovery's new step in proceeding according to procedures is also regarded as a legal defensive move.

Warner stressed on Tuesday that the board has not determined that Paramount's proposal is "likely to result in a better solution than the Netflix deal," but that the two sides will engage in dialogue - which also means that the outcome is not entirely without variables.

Netflix said in a statement that while it believes its transaction provides greater value and certainty for shareholders, given the disruption Paramount's continued actions are causing to shareholders and the entertainment industry as a whole, it has agreed to grant Warner Bros. Discovery a seven-day limited exemption period in order to fully resolve the matter.

Netflix also accused Paramount of misleading Warner shareholders on global regulatory risks, criticized its financial forecasts for being too low, and said that if Paramount and Warner reached a deal, it would lead to consolidation and layoffs.

Netflix also named the source of "foreign capital" in Paramount's acquisition funds - mainly from the royal families of Saudi Arabia, Qatar and Abu Dhabi - saying that this has raised serious national security concerns and is expected to face strict scrutiny from regulatory agencies in many countries.

Some analysts joked that the acquisition war surrounding Warner Bros. would be suitable to be made into a spin-off drama similar to "Succession" in the future.

Editor in charge: Chen Yujia