After the WBD board decided on Thursday that Paramount Skydance’s amended bid was a better one, Netflix is pulling out of an agreement to purchase Warner Bros. Discovery’s studio and streaming operations.
Paramount increased its offer to purchase all of WBD earlier this week from $30 per share, all cash, to $31 per share. An agreement between WBD and Netflix to sell the legacy media giant’s studio and streaming companies for $27.75 per share has been overturned.
It was the most recent change to Paramount’s several bids in the past few months, and it has since proceeded with a hostile bid to acquire the company. The increased bid was the consequence of Netflix giving WBD a seven-day exemption to resume negotiations with Paramount last week. The entire WBD, including its pay-TV networks such as CNN, TBS, and TNT, is up for grabs in Paramount’s offer.
The WBD board stated in a statement on Thursday that Netflix had four working days to modify its own proposal in response to Paramount’s better offer.
Rather, the streaming behemoth’s decision to withdraw ends a protracted drama in which both bidders made modified proposals. WBD CEO David Zaslav said in a statement, referring to Netflix co-CEOs Ted Sarandos and Greg Peters and CFO Spencer Neumann.
“Netflix is a great company and throughout this process, Ted, Greg, Spence, and everyone there have been extraordinary partners to us. We wish them well in the future. Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders. We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”
During Thursday’s extended trading session, Netflix’s shares surged 10%, while Paramount’s stock increased 5%. Warner Bros. Discovery’s stock dropped 2%. In an assertion, Sarandos and Peters said
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
