Netflix has withdrawn from the race to acquire Warner Bros Discovery, leaving the way clear for Paramount Skydance to win the months-long battle for the historic Hollywood studio.
Earlier this week, Paramount upped its offer to $31 per WBD share – an improvement on its initial $30 tender.
WBD said that the latest bid was "superior" to the one from Netflix, which last night refused to raise its offer.
Netflix Co-CEOs Ted Sarandos and Greg Peters released a statement on Thursday outlining their decision, saying that the deal is “no longer financially attractive” and that it “was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, 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 the Paramount Skydance bid,” the Co-CEOs said.
“Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer, and the WBD Board for running a fair and rigorous process,” they added. “We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the US. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Paramount is now likely to take control of the WBD film studios, streaming platforms, and TV networks, but will first have to gain regulatory approval.
“Netflix is a great company, and throughout this process, Ted, Greg, Spence, and everyone there have been extraordinary partners to us. We wish them well in the future,” said David Zaslav, president and CEO of WBD. “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.”
The latest Paramount bid included a $7bn breakup fee in the event the proposed merger doesn’t win regulatory approval. The company also agreed to pay the $2.8bn breakup fee that WBD would owe Netflix if that deal didn’t go through.
Paramount, which is looking to transform itself into a Hollywood heavyweight, is backed by tech billionaire Larry Ellison and led by his son, David.
WBD recently began mailing the definitive proxy statement to shareholders for the special meeting of shareholders to vote on the merger with Netflix. Discover more here.
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