Netflix drops Warner Bros. bid, Paramount emerges as winner

Netflix withdrew its planned acquisition of Warner Bros. Discovery after deciding not to match Paramount Skydance’s higher offer; Warner Bros. said Paramount’s $31-per-share proposal was superior.

Netflix has stepped away from its proposed purchase of Warner Bros. Discovery, allowing rival bidder Paramount Skydance to claim a superior offer. Netflix had agreed to buy the studio and streaming businesses in December, but Paramount re-entered the process with counteroffers that reopened the sale. Warner Bros. reviewed the competing bids and deemed Paramount's latest proposal superior. The competing offers included complex terms and guarantees tied to regulatory outcomes. Key facts: - Netflix said the deal it negotiated would have created shareholder value but that matching Paramount Skydance’s latest price was not financially attractive, so it declined to match the bid. - In December, Netflix had agreed to acquire Warner Bros.’ studio and streaming businesses in a transaction valued at $82.7 billion including assumed debt. - Warner Bros. announced it considered Paramount’s $31-per-share offer superior; media reports value Paramount’s proposal at about $111 billion. - Paramount’s offer included Warner Bros. cable networks such as CNN and TNT and featured adjustments including personal guarantees of more than $40 billion in equity from Larry Ellison and pledged payments of $2.8 billion to Warner Bros. to cover Netflix termination fees and $7 billion if regulatory approval is not obtained. - Market reaction showed Netflix shares rose as much as 13% in after-hours trading, Warner Bros. shares declined, and Paramount shares were largely unchanged. Summary: The withdrawal by Netflix clears the way for Paramount Skydance to pursue its proposed acquisition, though the transaction was reported with conditions tied to regulatory review and approvals. Undetermined at this time.