Warner Bros. Discovery said Tuesday that Paramount Skydance’s revised offer may top a bid from Netflix — the latest twist in the high-profile auction to claim one of Hollywood’s corporate jewels.

Warner Bros.’ board announced that Paramount’s revised proposal “could reasonably be expected to lead to a ‘Company Superior Proposal,’” which could lay the groundwork to scuttle Netflix’s $82.7-billion deal. Warner Bros. Discovery cautioned that its board members had not agreed to ditch the Netflix proposal but needs to continue to negotiate with Paramount.

Paramount late Monday offered to buy all of Warner Bros. Discovery for $31 a share plus an additional amount if the deal fails to close by later this year. Paramount had previously offered $30 a share.

In its revised bid, Paramount also agreed to pay a $7-billion termination fee should a Paramount deal fail to muster regulatory approvals. Paramount also said it would pay $2.8 billion to terminate Warner Bros.’ deal with Netflix.

“There can be no assurance that the Board will conclude that the transaction proposed by PSKY is superior to the merger with Netflix or that any definitive agreement or transaction will result from WBD’s discussions with PSKY,” Warner said.

The move came hours after Warner Bros. said it had received Paramount’s revised bid and was mulling the details. Paramount separately confirmed that it had submitted a revised offer.

The Larry Ellison-backed Paramount had been facing a late Monday night deadline to boost its bid to claim the company that owns CNN, HBO, TBS and the storied Warner Bros. movie and film studios. Last week, the auction’s winning bidder — Netflix — agreed to allow Warner Bros. Discovery to reopen talks with Paramount for seven days to determine whether Paramount would bring more money to the table.

Warner instructed Paramount to present its “best and final” offer.

Netflix has matching rights should Warner Bros. Discovery reverse course and accept the Paramount bid.

The move comes nearly three months after Warner’s board unanimously agreed to sell HBO and studio assets, including its deep library that includes Superman, Harry Potter, Scooby-Doo, “Game of Thrones,” and “The Big Bang Theory,” to Netflix for $27.75 a share.

Netflix’s deal does not include Warner’s basic cable channels, including CNN, TBS and HGTV.

Those channels are slated to be spun off to a new company later this year.

But Paramount, managed by scion David Ellison, has repeatedly cried foul, saying its cash bid for all of Warner Bros. Discovery, including the Warner cable channels, would be more lucrative for shareholders. Paramount, which enjoys friendly relations with President Trump, has also boasted that it has a more certain path to win U.S. regulatory approval compared to Netflix.

But Warner Bros.’ board has stuck with Netflix’s bid, saying the streaming giant’s financing was more secure.

“The Netflix merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction,” Warner said in its Tuesday statement.

Warner Bros. Discovery told Paramount last week that it expected the billionaire Ellison to put more money into the deal.

Paramount has previously said that the tech billionaire would guarantee more than $41 billion in equity financing that was needed to pull off the more than $108-billion takeover.

Under Paramount’s previous offer, the Ellison family was planning to contribute about $12 billion. Another $24 billion was expected to come from royal families in Saudi Arabia, Qatar and Abu Dhabi.

In recent weeks, Paramount agreed to cover a $2.8-billion breakup fee that Warner would owe Netflix should Warner walk away from the Netflix deal. Paramount also suggested that it would increase its offer to at least $31 a share.

The move comes amid heightened political interest in the monumental deal that would reshape Hollywood.

The Department of Justice is investigating whether a Netflix takeover, or Paramount’s alternative bid, would harm competition.

Republican lawmakers have been critical of the Netflix deal, saying it would blunt competition.

Trump has said he didn’t plan to get involved in the investigation, but over the weekend he threatened Netflix, writing on social media that Netflix must fire Susan Rice, a former high-level Obama and Biden administration official, from its board or “pay the consequences.”

Warner Bros. Discovery is consulting with investment bankers from Allen & Company, J.P. Morgan and Evercore and the law firms Wachtell Lipton and Debevoise & Plimpton.

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