Members of the Warner Bros. board are discussing whether Paramount could offer a path to a superior deal, people familiar with the board’s thinking said, a move that may ignite a second bidding war with Netflix Inc. The board hasn’t decided how to respond and still has a binding agreement with Netflix, said the people, who asked not to be identified discussing nonpublic information. 

Paramount submitted amended terms last week that addressed several concerns. The company will cover a $2.8 billion fee owed to Netflix if Warner Bros. terminates their agreement, and is offering to backstop a Warner Bros. debt refinancing. Paramount also said it will compensate Warner Bros. shareholders if the deal doesn’t close by Dec. 31, underscoring its confidence that the deal will get swift regulatory approval. 

Warner Bros. still has some concerns about Paramount’s offer, many of which it has outlined in past statements, but this is the first time the board has considered Paramount’s offer could lead to a better deal or prompt Netflix to up its bid. It has also faced pressure from shareholders to at least engage with Paramount.

Warner Bros. has agreed to sell its namesake studio and HBO Max streaming business to Netflix in a $27.75 a share deal.

Warner Bros. has been racing to hold a shareholder vote on its Netflix agreement, while Paramount, the owner of CBS and MTV, has been appealing directly to Warner Bros. shareholders through a $30-a-share tender offer and is lobbying regulators to approve its deal. 

Both Paramount and streaming leader Netflix have indicated they would be willing to raise their bids in order to secure a deal for Warner Bros., one of the largest US media companies. Paramount Chief Executive Officer David Ellison has said the current offer isn’t his last and final bid, while Netflix’s leadership has told shareholders it could go higher as well. 

Both companies are wary of spending too much. Shares of Netflix have declined more than 40% from their June peak as investors have fretted about the Warner Bros. deal. 

Chris Marangi, co-chief investment officer at Gabelli Funds, said that while he was a bit disappointed Paramount didn’t raise its offering price this week, the latest changes to the terms suggest the company is finding “ways to be creative about structuring a deal.”

“Like the Warner Bros. board, I want to see a sweetened offer,” said Marangi, whose company owns Warner Bros. shares.

If Warner Bros. decides to re-engage with Paramount, it would need to notify Netflix first. Warner Bros. would then try to get Paramount to increase its offer beyond $30 a share. If Warner Bros. decided Paramount’s new offer was superior, Netflix would have the right to match it.

Paramount triggered the auction of Warner Bros. with an unsolicited offer last year. The company increased the price several times before ultimately losing to Netflix. Paramount leadership has insisted its deal is better and has spent the last couple months wooing regulators and shareholders.

A number of Warner Bros. shareholders, including Pentwater Capital Management and Ancora Holdings Group, have gone public with their belief that the board should engage with Paramount. But just 42.3 million shares were tendered to Paramount at last count, less than 2% of those outstanding.