Activist investor Ancora Capital has acquired a stake in Warner Bros. Discovery and intends to oppose a proposed transaction between the media conglomerate and Netflix involving its studio and streaming assets, marking the latest development in a fierce acquisition battle within Hollywood.

Ancora Capital holds an investment of approximately $200 million in the company, which owns HBO. The firm stated on Wednesday that the board of Warner Bros. Discovery failed to adequately engage with a competing offer from Paramount Global to acquire all of the company's assets, including cable networks such as CNN and TNT.

The activist investor expressed on its official website that the currently proposed Netflix-Warner Bros. Discovery deal requires shareholders to accept a lower valuation, bet on an uncertain asset spin-off, and bear significant regulatory risks. In contrast, Paramount has presented a superior offer of $30 per share, which is both higher and more certain.

Both Paramount and Netflix are vying for Warner Bros. Discovery's leading film and television production studios, extensive content library, and valuable intellectual properties such as "Game of Thrones," "Harry Potter," and DC Comics superhero series including Batman.

Warner Bros. Discovery, Paramount, and Netflix did not immediately respond to requests for comment from Reuters. Warner Bros. Discovery currently has a market capitalization of approximately $68 billion, indicating that Ancora Capital's stake represents less than 1% of its outstanding shares.

On Tuesday, Paramount enhanced its bid by offering to pay additional cash to Warner Bros. Discovery investors on a quarterly basis if the transaction is not completed beyond this year. The company also agreed to cover the $2.8 billion breakup fee that Warner Bros. Discovery would owe if it terminates the deal with Netflix.

Paramount did not increase its offer of $30 per share, valuing the total enterprise at $108.4 billion including debt. However, it reiterated that its proposal has a clearer path to regulatory approval compared to Netflix's bid of $27.75 per share, which values the company at $82.7 billion including debt.

The company, which owns CBS, extended its tender offer deadline last month to February 20 to secure investor support. Analysts have indicated that Paramount must improve its offer to resume negotiations with the board of Warner Bros. Discovery.

Warner Bros. Discovery has announced plans to hold a shareholder vote on the Netflix transaction by April.

At the heart of the bidding war is Warner Bros. Discovery's plan to spin off its cable television assets, a key component of the Netflix deal.

The board of Warner Bros. Discovery considers Netflix's proposal superior to Paramount's because its investors would retain shares in a separately listed Discovery Global entity.

Paramount argues that the cable assets hold minimal value and that Netflix's offer exposes Warner Bros. Discovery shareholders to significant uncertainty, as the cash amount they would receive depends on the financial condition of Discovery Global at the time of the spin-off.

Paramount, led by David Ellison, has extended its tender offer deadline to February 20 to allow more time to persuade investors.