Netflix says it won't raise bid for Warner Bros.
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Netflix said Thursday that it won't raise its bid for Warner Bros. Discovery's streaming and studio assets, allowing Paramount Skydance to emerge as the winning bidder.
Why it matters: The statement came shortly after WBD's board announced that Paramount's revised bid of $31 per share was superior to its deal with Netflix.
What they're saying: Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement that their deal "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."
- They thanked WBD and its board, "but this transaction was always a 'nice to have' at the right price, not a 'must have' at any price."
- WBD CEO David Zaslav said: "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."
Zoom in: Netflix's existing merger agreement with WBD gave it four business days to match or top Paramount's offer.
- WBD's board could then terminate its merger agreement with Netflix if it determined that Paramount's bid was still superior.
- Paramount has said it would pay the $2.8 billion termination fee that WBD would owe Netflix if it were to end its existing merger agreement.
Catch up quick: Paramount this week raised its offer price, termination fee and the timeline for a ticking fee.
- That came after WBD obtained a limited waiver from Netflix to reopen deal talks with Paramount.
- Both Paramount and WBD reported earnings this week, but offered little commentary on the deal talks.
The big picture: WBD's board repeatedly rebuffed offers and ultimately got Paramount to raise its bid to $31, up 63% from the original bid of $19 in September.
The bottom line: Paramount appears to have won the fight for WBD — if it obtains all the necessary approvals.
- The combined company would own two storied Hollywood studios, cable channels like CNN and TBS, streaming businesses and the broadcaster CBS.
Editor's note: This story has been updated with statements from Netflix and Warner Bros. Discovery, as well as additional details throughout.
