Warner Bros Discovery’s board says a revised takeover proposal from Paramount Skydance could lead to a superior offer to its existing agreement with Netflix, reopening the door to a potential bidding war for the Hollywood studio.

The sweetened bid values Warner at $US31 a share, topping Netflix’s agreed $US27.75-a-share deal.

In a statement overnight, the company said the updated Paramount proposal “could reasonably be expected to lead to a Company Superior Proposal”, though the board has not yet changed its recommendation that shareholders back the agreed Netflix transaction.

If the board ultimately determines Paramount’s offer is superior, Netflix will have four business days to respond with a counterbid.

Paramount’s latest offer values Warner at about $US108 billion including debt, compared with roughly $US82.7 billion for Netflix’s agreed deal.

The new bid represents a $1 increase on Paramount’s previous $US30-a-share proposal and includes a 25-cent per share quarterly “ticking fee” from 30 September if regulatory approval is delayed.

Paramount has also offered a $US7 billion regulatory termination fee if the deal is blocked and agreed to contribute additional equity if required by lenders. It has further committed not to cite deterioration in Warner’s cable networks as grounds to walk away.

The battle centres on prized assets including HBO, the Warner Bros studio and franchises such as Harry Potter, DC Comics and Game of Thrones.

Netflix’s deal would carve out Warner’s studio and streaming operations, while spinning off its global linear networks, including CNN and Discovery, into a separate company for existing shareholders.

Paramount, led by David Ellison (pictured) and backed by Oracle billionaire Larry Ellison, is seeking to acquire the entire company.

Warner shareholders are due to vote on the Netflix deal next month, but with Paramount back at the table, the final outcome remains far from certain.