Warner Bros. Discovery Finds Paramount Bid ‘Superior’ as Netflix Backs Down

Paramount Skydance appears set to win its bidding war against Netflix to acquire Warner Bros. Discovery. 

Late Thursday, Netflix walked away from its planned acquisition of HBO, HBO Max, and Warner Bros. studios’ business. The streaming giant said it “had declined to raise its offer” after Paramount submitted a revised all-cash bid of $31 per share on Tuesday to buy WBD in its entirety. WBD had reviewed the rival offer and announced that its board of directors found it “superior” to the Netflix agreement. 

Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement: “At the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive.” 

The statement went on to say: “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.”

However, according to Netflix, the transaction was more of a “nice to have” than a “must have” at any price. 

If approved, Paramount’s new bid would see it not only pay $31 per share in cash, but also be on the hook for a $2.8 billion termination fee that WBD would owe Netflix for backing out of its agreement. Additionally, Paramount would also be responsible for paying “a daily ticking fee equal to $0.25 per share per quarter beginning after Sept. 30, 2026,” according to WBD, and pony up $7 billion should the deal not pass regulatory requirements.

Paramount’s deal is backed by cash from Larry Ellison, the billionaire father of Paramount CEO David Ellison. 

The merger-acquisition plan between Netflix and WBD was originally announced on Dec. 5 for $83 billion (stocks and cash). The deal has since seen several takeover bids from Paramount, prompting Netflix to switch to an all-cash deal in January while Paramount engaged in a back-and-forth to acquire all of Warner Bros. Discovery.

The announcement arrives on the day of WBD’s Q4 earnings call, and the same day that Netflix’s Sarandos visited Washington, DC, to meet with officials amid the Paramount bid. 

CNET’s Corinne Reichert also contributed to this report.