Netflix exits bidding war, clearing path for Paramount Skydance’s takeover of Warner Bros. Discovery in a deal valued around $108 billion.
NEW YORK: Paramount Skydance is poised to take control of Warner Bros. Discovery after Netflix declined to raise its takeover offer. This ends one of the biggest media bidding wars in a generation.
The deal places a constellation of media properties under the control of the family led by Oracle tycoon Larry Ellison. These properties range from CNN and Nickelodeon to HBO.
Netflix stated it was “declining to match” Paramount’s latest offer. The Warner Bros. board had declared that offer a “Superior Proposal” under its existing merger agreement with Netflix.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix said in a statement.
“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,” it added.
The streaming giant insisted it “would have been strong stewards of Warner Bros.’ iconic brands”. It concluded the transaction was a “‘nice to have’ at the right price, not a ‘must have’ at any price.”
Without a Netflix counteroffer, the Warner Bros. Discovery board can now terminate its agreement with Netflix. It will instead proceed with the Paramount deal.
A shareholder vote on the Netflix agreement scheduled for March 20 is now essentially moot. Attention shifts to securing approval for the Paramount transaction instead.
Paramount’s sweetened offer was the latest in a bidding war that drew White House attention. President Donald Trump had insisted he had a say in the outcome.
Crucially, the proposal included a commitment from Oracle founder Larry Ellison to contribute additional funding if needed. This would support solvency requirements from Paramount’s lending banks.
Ellison largely financed his son David’s takeover of Paramount and subsequent bid for Warner Bros. He is also a longtime ally of President Trump.
Republican lawmakers came out against Netflix during the deal process. They accused it of promoting pro-trans content on its platform, which co-CEO Ted Sarandos strenuously denied.
Hours before withdrawing, Sarandos was filmed entering the White House for talks with officials. CNBC reported he did not meet with the president.
The Paramount offer also includes financing from the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. This could attract an additional layer of regulatory scrutiny.
The revised offer included a purchase price of $31.00 per share in cash. This one-dollar increase values the company at around $108 billion.
Paramount has also offered a $7 billion regulatory termination fee should the deal fail. It agreed to cover the $2.8 billion breakup fee Warner Bros. would owe Netflix.
A combined entity would bring together streaming services HBO Max and Paramount+. It would also merge two of Hollywood’s largest movie studios.
