Warner Bros. Discovery is considering reopening discussions on a potential sale with rival Hollywood studio Paramount Skydance Corp. after receiving Paramount’s latest revised proposal, according to people familiar with the matter cited by Bloomberg.

Sources say Warner Bros. board members are evaluating whether Paramount’s offer could pave the way for a better deal, potentially triggering a second round of bidding with Netflix Inc. The board has not yet decided how to proceed, while remaining bound by a legally binding agreement with Netflix, the sources said, requesting anonymity.

Paramount submitted amended terms to its “aggressive” proposal last week, addressing several concerns previously raised. The company has pledged to cover the $2.8 billion fee owed to Netflix if Warner Bros. terminates its deal with the streaming giant. Paramount is also offering to refinance Warner Bros.’ debt and guarantee compensation to shareholders if the transaction is not completed by December 31, reflecting its confidence in receiving swift regulatory approval.

Warner Bros. still has reservations about Paramount’s offer, many of which have been publicly noted. However, this marks the first time the board has seriously considered that Paramount’s proposal could lead to a better deal or prompt Netflix to increase its offer. Meanwhile, the company has faced pressure from shareholders to at least engage in negotiations with Paramount.

Background on the Netflix Deal

Warner Bros. had previously agreed to sell its film studio and streaming platform HBO Max to Netflix in a deal valued at $27.75 per share. The company is seeking to expedite a shareholder vote to approve the Netflix transaction. Paramount, which owns CBS and MTV, has been appealing directly to Warner Bros. shareholders through a public tender offer of $30 per share and is lobbying regulators to approve its own bid.

Both Paramount and streaming leader Netflix have indicated they may raise their offers to secure Warner Bros., one of the largest media companies in the U.S. Paramount CEO David Ellison has said that the current proposal is not final, while Netflix management has told shareholders it could move to a higher bid.

However, both parties appear cautious about excessive price escalation. Netflix shares have fallen more than 40% from their June high, amid investor concerns over the Warner Bros. deal.

If Warner Bros. decides to resume negotiations with Paramount, it must notify Netflix first. The company would then seek to increase Paramount’s offer beyond $30 per share. If the board determines that Paramount’s revised proposal is superior, Netflix would have the right to match it.

Several Warner Bros. shareholders, including Pentwater Capital Management and Ancora Holdings Group, have publicly expressed support for entering negotiations with Paramount. Yet, according to the latest available data, only 42.3 million shares—less than 2% of outstanding shares—have been tendered to Paramount so far.