Recommendations of the Editorial team
Netflix has pulled out of the bidding war to acquire Warner Bros. Discovery (WBD), declining to increase its offer to counter rival Paramount Skydance’s higher bid submitted this week by David Ellison.
In a statement released Thursday, Netflix co-CEOs Ted Sarandos and Greg Peters announced their decision, saying that “the deal is no longer financially attractive at the price needed to match Paramount Skydance’s recent offer.”
“The transaction we negotiated would have created value for shareholders and provided a clear path to regulatory approval,” said the streaming giant’s co-CEOs. “However, we have always taken a disciplined approach – and at the price that would be necessary to match Paramount Skydance’s latest offer, the deal is no longer financially attractive. We are therefore refraining from exceeding Paramount Skydance’s offer.”
Ellison’s billion-dollar counteroffer
In December, Netflix appeared poised to acquire much of WBD’s business – including HBO and the Warner Bros. film studio – for $83 billion. Ellison, tech heir and son of Oracle billionaire founder Larry Ellison, then launched a takeover bid for $111 billion. The offer included a purchase price of $31.00 per WBD share in cash (Netflix had originally offered $27.75 per share) and also included the assumption of the $2.8 billion contractual penalty that Warner Bros. would have had to pay to Netflix.
With Netflix out of the field, the path is clear for Ellison’s Paramount to win the battle to become the global media conglomerate – a company that owns lucrative IPs for franchises such as “Harry Potter,” the DC Universe, Looney Tunes, Scooby-Doo, “Fifty Shades of Grey” and “The Lord of the Rings.”
However, the agreement between Paramount Skydance and WBD has not yet been officially sealed – it still requires approval from US and European regulatory authorities.
