Netflix ends bid for Warner Bros. after Paramount offered $111B
Feb. 27 (UPI) — Netflix has decided to let go of its attempt to buy Warner Bros. Discovery after Paramount Skydance raised its purchase offer.
On Wednesday, Paramount raised its cash offer from $30 per share to $31 per share. On Thursday, WBD decided the offer was superior to Netflix’s offer, prompting the drop out.
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” said co-CEOs Ted Sarandos and Greg Peters in a statement.
Netflix’s bid was for $27.75 per share for the studios and streaming, while Paramount’s bid is for the entirety of the company.
“We’re super-disciplined buyers,” The New York Times reported Sarandos said earlier this month. “I’m willing to walk away and let someone else overpay for things.”
Netflix and Paramount have been duking it out over WBD since October. They had a bidding war, and WBD accepted Netflix’s offer on Dec. 5. Soon after, Paramount launched a hostile bid to buy WBD, but the board wasn’t interested. Then, Paramount announced that billionaire Oracle creator Larry Ellison would back the deal with $40 billion in equity. On Jan. 20, Netflix changed its offer to all cash, then on Feb. 10, Paramount did the same and added some extras.
Netflix granted WBD a seven-day pause on the deal to evaluate Paramount’s offer, and during that time, Paramount raised the bid even more to $31 per share.
If the deal doesn’t pass federal regulatory scrutiny, Netflix could come back and try again.
“We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing,” David Ellison, Paramount CEO, said in a statement Thursday.
Warner Bros. CEO David Zaslav expressed gratitude to Netflix.
“Netflix is a great company, and throughout this process Ted [Sarandos], Greg [Peters], [CFO Spencer Neumann] and everyone there have been extraordinary partners to us. We wish them well in the future,” CNBC reported Zaslav said in a statement. “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.”
Netflix stock rose 10% in extended trading Thursday, while Paramount stock jumped 5%, CNBC reported. Shares of Warner Bros. Discovery dropped 2%.
