Netflix abandons Warner Bros. deal Discovery after Paramount’s offering was deemed superior

Netflix He stays away from the purchase deal Warner Bros. Discovery studio and streaming assets after WBD’s board of directors on Thursday considered a previously revised proposal Paramount Skydance To be a superior offer.

Earlier this week, Paramount raised its offer to buy all of WBD to $31 per share, up from $30 per share, all in cash. It was the latest shake-up of several Paramount shows in recent months — and since moving forward with a hostile bid to buy the company — and a deal between WBD and Netflix to sell the legacy media company’s studio and streaming business for $27.75 per share has now been canceled.

Last week, Netflix granted WBD a seven-day waiver under the terms of its deal to re-engage with Paramount, sending the show soaring. Paramount’s offering includes all of WBD, including pay TV networks such as CNN, TBS and TNT.

Netflix has four business days to make changes to its own proposal in light of Paramount’s superior bid, WBD’s board said in a statement Thursday.

Instead, the streaming giant’s decision to pull out puts a pin in a long saga that has seen modified shows from both presenters.

Netflix shares rose 10% in extended trading Thursday. Warner Bros. shares fell. Discovery by 2%.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Ted Sarandos and Greg Peters, Netflix’s co-CEOs, said in a statement on Thursday. “However, we have always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we decline to match Paramount Skydance’s offer.

Paramount’s latest offer included a $7 billion breakup fee if the proposed merger did not receive regulatory approval. The company also agreed to pay the $2.8 billion breakup fee that WBD will owe Netflix if the deal does not go through.

Sarandos told CNBC’s Julia Boorstin in an interview last week that the company granted WBD the waiver to reopen Paramount talks in order to provide shareholder clarity.

“Paramount has made a lot of noise, overwhelming the area with confusion for shareholders… including putting up all these virtual pitches and talking directly to shareholders and bypassing the board of directors of Warner Bros. Discovery,” Sarandos said at the time. “So it gave us the opportunity to give these shareholders exactly what they deserve, which is complete clarity and certainty.”

However, Sarandos did not comment on whether Netflix would raise its own offer to match Paramount’s revised offer.

“Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer, and the WBD Board of Directors for running a fair and rigorous process,” Netflix co-CEOs said in their statement.

“We believe we would have been strong stewards of Warner Bros.” “Iconic brands, and our deal would have strengthened the entertainment industry and preserved and created more productive jobs in the United States,” they said. “But this deal was always something that was nice to have at the right price, not something that was necessary at any price.”

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