The battle for Warner Bros. Discovery is heating up as entertainment giants Paramount Global and Netflix prepare for a protracted contest expected to last into 2026.

Paramount launched a hostile $30-per-share takeover bid on Monday, giving Warner Bros. 10 business days to respond. However, insiders reveal Warner Bros.' board has no intention of terminating last week's merger agreement with Netflix, having previously rejected Paramount's offer. Terminating the Netflix deal would trigger a $2.8 billion breakup fee.

This forces Paramount to strategize its next move in what analysts predict will be a months-long tug-of-war. Options include proceeding with its tender offer to acquire Warner Bros. shares at $30 each starting January 8, extending the offer deadline, filing litigation to block Netflix's transaction, or sweetening its bid.

"Could we see another $5 or $10 billion added to the offer? I think that's highly likely," said former Disney dealmaker Kevin Mayer during UBS's media conference Tuesday. "Simply re-proposing the same rejected terms directly to shareholders probably won't succeed."

As one of Hollywood's largest studios, Warner Bros. shareholders anticipate a bidding war to drive up the acquisition price. Paramount's offer values HBO's parent company at $108.4 billion including debt, while Netflix proposes acquiring Warner Bros.' production studios, streaming assets and HBO operations through a cash-and-stock deal.

Both suitors have signaled capacity to increase their offers, according to people familiar with the private negotiations who requested anonymity.