Major Highlights
- Warner Bros. Discovery’s board concluded that Paramount Skydance’s upgraded $31-per-share all-cash proposal offered superior value, prompting Netflix to withdraw from the acquisition race.
- Paramount’s enhanced bid rose from $30 to $31 per share, covering WBD’s complete portfolio spanning CNN, HBO, and legacy cable channels.
- Netflix declined to submit a counter-offer, declaring the deal was “no longer financially attractive” at the elevated price point.
- Under the Paramount arrangement, WBD’s $2.8 billion breakup fee to Netflix will be covered, while Paramount faces a $7 billion penalty should the deal fall through.
- Netflix stock jumped around 10% in after-hours trading; WBD shares fell approximately 2%, while Paramount gained roughly 5%.
Netflix ($NFLX) stock witnessed a notable rally in Thursday’s extended trading session after the streaming leader withdrew from its pursuit of Warner Bros. Discovery assets, clearing the path for Paramount Skydance to finalize a deal valued at roughly $111 billion.
The board at Warner Bros. Discovery concluded that Paramount’s elevated bid of $31 per share in all-cash terms represented a “superior offer” when compared to Netflix’s existing agreement, which stood at $27.75 per share and covered exclusively WBD’s film studio and streaming assets.
Netflix received a four-day window to present a counter-proposal but opted not to match the offer.
“The deal is no longer financially attractive,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement. “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Wall Street reacted positively to the disciplined approach. Netflix shares jumped approximately 10% in after-hours trading.
A week prior, Netflix had willingly provided WBD with a seven-day window to explore alternative negotiations with Paramount, enabling shareholders to weigh all options. Sarandos told CNBC the move was designed to ensure “complete clarity and certainty.”
In the end, this strategic patience enabled Netflix to exit the competition gracefully.
Paramount’s Comprehensive Bid
Paramount’s all-cash offer at $31 per share covers the entirety of WBD‘s operations — going far beyond the studio and streaming platforms to encompass CNN, TBS, TNT, HBO Max, Food Network, and numerous sports rights.
This marks a considerably more expansive transaction than Netflix’s initial proposal.
Furthermore, Paramount agreed to assume responsibility for the $2.8 billion breakup payment owed to Netflix by WBD, while simultaneously establishing a $7 billion termination fee of its own if regulatory approval fails.
David Zaslav, WBD’s CEO, described the deal as one that would “create tremendous value” for shareholders after the board officially endorsed the merger agreement.
David Ellison, CEO of Paramount Skydance, indicated the offer delivers “superior value, certainty and speed to closing.”
Regulatory Scrutiny Ahead
The deal is nowhere near completion. California Attorney General Rob Bonta declared Thursday that this combination “is not a done deal,” citing an active investigation by the state’s Department of Justice.
The proposed combination must secure approval from both the U.S. Department of Justice and European competition authorities.
Paramount’s funding arrangement — which includes ties to tech billionaire Larry Ellison and formerly involved Jared Kushner’s Affinity Partners fund — has drawn scrutiny over potential political connections to the Trump administration.
Kushner’s fund exited the deal in December. Nevertheless, questions about the transaction’s political dimensions remain, particularly regarding CNN, which Trump has repeatedly attacked and indicated should be sold off in any WBD transaction.
Mark Thompson, CNN’s chief executive, sent staff a memo Thursday urging them not to “jump to conclusions about the future until we know more.”
Netflix shares rose approximately 10%, WBD fell around 2%, and Paramount increased about 5% during Thursday’s after-hours session.
