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Warner Bros Discovery has said it is reopening takeover talks with Paramount Skydance, giving the studio giant a week to make its “best and final offer”.

Netflix agreed a takeover deal to buy Warner Bros’ studio and streaming business last month but was granted a seven-day waiver to allow the business to hold talks with Paramount Skydance.

Bosses at Warner Bros are continuing to tell shareholders to back the Netflix offer valuing the business at around 82.7 billion US dollars (£61.2 billion).

They also rejected a fresh bid by Paramount Skydance to buy the Harry Potter franchise owner.

However, Warner Bros said the rival studio, which makes franchises including Mission: Impossible and Star Trek, has a deadline of February 23 to improve its deal or get out of the way of its proposed takeover by Netflix.

Warner Bros said in a regulatory filing on Tuesday that the process will allow it to discuss unresolved “deficiencies” in Paramount’s previous offers.

Netflix’s deal would see it acquire Warner Bros’ studio and steaming business, including extensive library of film and TV rights, as well as its HBO Max streaming service.

However, the agreed deal would close after Warner Bros Discovery completes a proposed spin-off of its cable channels, which include CNN, TBS and TNT Sports in the UK.

Paramount’s bid, which was worth 108.4 billion dollars (£79.4 billion), offered to buy the whole of the Warner Bros Discovery business.

David Zaslav, president and chief executive officer of Warner Bros Discovery, said: “Throughout the entire process, our sole focus has been on maximizing value and certainty for WBD shareholders.

“Every step of the way, we have provided Paramount Skydance with clear direction on the deficiencies in their offers and opportunities to address them.

“We are engaging with Paramount Skydance now to determine whether they can deliver an actionable, binding proposal that provides superior value and certainty for WBD shareholders through their best and final offer.”