Paramount Skydance won the months-long bidding war for Warner Bros. Discovery as rival Netflix bowed out of the competition Thursday.
The streaming giant said it wouldn’t raise its offer after WBD’s board earlier labeled a revamped bid from Paramount Skydance a “superior proposal.”
Warner Bros.’ announcement had the potential to trigger a four-business-day window for Netflix to match Paramount’s offer. But by the evening, the streaming giant opted to bow out, instead.
“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,” Netflix Co-CEOs Ted Sarandos and Greg Peters said in a statement.
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” they added.
David Ellison’s Paramount Skydance had offered $31 per share in cash for WBD, plus a 25-cent quarterly “ticking fee” per share for any delays after Sept. 30.
The offer also included a $7 billion regulatory breakup fee and covered the $2.8 billion penalty Warner Bros. Discovery would owe Netflix if it bolts.
“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,” Ellison said in a statement issued before Netflix bowed out.
A takeover target can label an external bid as a “company superior proposal” that’s financially stronger and more viable if it has been vetted by independent advisors.
Netflix’s offer for Warner Bros. Discovery was an all-cash transaction valued at $27.75 per share.
It came after officials on both sides of the Atlantic warned that Netflix could face the ire of anti-trust authorities, prompting CEO Ted Sarandos to lobby Washington and major European capitals that the proposed deal should get the green light.
Perks offered by Paramount include Ellison’s dad — Oracle founder Larry Ellison, a close ally of President Trump’s — pledging extra equity for lender solvency.
Warner Bros. Discovery, which is led by CEO David Zaslav, said it still views Netflix as its preferred buyer for now.
“The Netflix merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction and has not withdrawn or modified its recommendation,” the company said in a statement before the streamer said it wouldn’t raise its offer.
It is thought that any new company that emerges from the bidding war, which would include HBO Max, would rival tech giants Amazon and Apple in the increasingly competitive streaming market.
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