Netflix declines to match Paramount offer for Warner Bros Discovery | Netflix
Netflix has abandoned its plan to take over Warner Bros Discovery, refusing to raise its bid for the media conglomerate’s famous Hollywood studios and streaming businesses after Paramount determined Skydance’s sugary rival bid was “superior”.
Netflix co-chairmen Ted Sarandos and Greg Peters said in a statement Thursday evening that “the deal, at a price that should match Paramount Skydance’s last offer, is no longer financially attractive.”
In its revised offer, Paramount offered the company $31 per share, down from $30, a $7 billion statutory termination fee if the merger doesn’t go through, and a “transition fee” of about $650 million in cash every three months, starting after September.
Netflix was given four business days to exceed Paramount’s revised offer, but quickly decided not to do so.
“We believe we will be strong stewards of Warner Bros.’ iconic brands and that our agreement will strengthen the entertainment industry and preserve and create more manufacturing jobs in the United States,” Sarandos and Peters said in a statement.
“But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Netflix’s reluctance to revise its $82.7 billion bid for WBD’s studio and streaming assets means the Ellison family is now expected to buy the entire company, including cable news network CNN.
Paramount’s CEO, David Ellison, issued a statement early Thursday saying the company was “pleased that WBD’s board of directors unanimously approved the outstanding value of our proposal, which provides superior value, certainty and speed to closing for WBD shareholders.”
WBD had announced that a special meeting would be held on March 20 for shareholders to vote on the Netflix merger.
Netflix’s announcement of withdrawing from the agreement came after Sarandos Meetings were held in Washington With officials from the Trump administration.
Netflix’s merger with WBD was expected to be subject to strict regulatory scrutiny, including a comprehensive review by the Department of Justice to determine whether it posed a threat to competition in the entertainment industry.
In their statement, Sarandos and Peters thanked WBD “for conducting a fair and rigorous process.”
“The transaction we are negotiating would create shareholder value with a clear path to regulatory approval,” executives said. “However, we have always been disciplined and the deal at the price required to match Paramount Skydance’s latest offer is no longer financially attractive, so we decline to match the Paramount Skydance offer.”
“As a public company, we will continue to do what we have done for more than 20 years: delight our members, profitably grow our business and enhance long-term shareholder value,” Sarandos and Peters said.
White House officials had long favored Paramount’s offer, considering the Ellison family to have a friendly relationship with the president.
