Netflix declines to make new bid after WBD chooses Paramount
Netflix declines to make new bid after WBD chooses Paramount
After WBD declared Paramount’s newest offer superior to the agreed-upon Netflix deal, the streamer declined to restart a bidding war.
And that appears to be that. Paramount Skydance proved that patience and perseverance do pay off this week, as the company has seemingly won the ability to attempt to complete its long-cherished goal of purchasing Warner Bros. Discovery. The WBD board has recommended acceptance of the new, $31-per-share offer Paramount tendered earlier this week, and Netflix has declined its opportunity to put in a new bid of its own, effectively ending the twist-filled saga of WBD’s acquisition.
Key Details:
- Call it: Netflix is declining to make a new bid for WBD following a pivot by that company’s board to Paramount.
- Money talks: Paramount added $1 per share to its offered price in its latest bid.
- Hurdle cleared: The merger of WBD with Paramount has already passed government regulators.
Late Thursday, the WBD board announced that it had determined the offer sheet turned in by Paramount earlier this week was, in fact, a better overall deal than the bid the board had accepted from Netflix back in December.
Per that deal, the decision gave Netflix four days to respond with a sweetened offer of its own. But the streamer declined to do so, with co-CEOs Greg Peters and Ted Sarandos making a joint statement to pull their company officially out of the running.
“We’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive,” they said.
“We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing,” Paramount CEO David Ellison said in a statement of his own.
When WBD put itself on the market last fall, company CEO David Zaslav said he wanted to instigate a bidding war, and that clearly came to fruition. After Comcast, Netflix, and Paramount all jumped into the fray with meaningful offers, Zaslav was able to pit Netflix and Paramount against each other, even after accepting the former’s offer. But soon, the pursuit became a two-company race, as Comcast dropped out of the proceedings early in the game.
WBD accepted a bid from Netflix in early December, but Paramount immediately launched a hostile takeover attempt, arguing that the Netflix merger would never pass muster with regulators. Just last week, the Department of Justice began an investigation to see if Netflix’s purchase of WBD would violate antitrust laws.
Sarandos had been gearing up for a trip to the White House to discuss the proceedings with President Trump on Thursday, but after seeing the details of Paramount’s latest offer, decided to throw in the towel instead. The thought of trying to persuade the president and other lawmakers no doubt helped to make the decision easier for Sarandos. Paramount Skydance CEO David Ellison and especially his billionaire father, Larry, have close personal, political, and financial ties to Trump and his administration.
Paramount’s proposed offer to purchase WBD still needs final regulatory approval from state and federal officials. California’s attorney general has said the merger is far from a done deal and that a thorough review of the transaction is still in order. Likewise, Sen. Adam Schiff (D-CA) said that federal lawmakers will still take their time in looking over the deal.
“What was true for Netflix is still true now for Paramount,” he said. “The merger of two of Hollywood’s biggest studios must be subject to the highest levels of scrutiny, free from White House political influence, to determine its impact on American jobs, freedom of speech, and the future of one of our nation’s greatest exports.”
WBD has scheduled a special investor meeting in March, where the deal will likely be given the thumbs-up by its shareholders. Thus ending one of the most contentious media merger attempts in recent memory. Barring regulatory setbacks, Paramount Skydance will now become the owner of Warner Bros. Discovery, including its streaming and studio businesses, as well as its linear networks.
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