Paramount has won the battle to acquire Warner Bros Discovery (WBD) after Netflix announced it will not raise its offer for the company.
The decision follows an announcement by WBD’s board that it viewed Paramount’s latest offer for the company as a “Superior Proposal”.
In its latest offer, Paramount raised its bid to $31 per share for the company, up from $30, a $7 billion regulatory termination fee if the merger is not improved, and a “ticking fee” amounting to about $650 million in cash each quarter beginning after September.
In a statement, Netflix’s co-CEOs Ted Sarandos and Greg Peters said: “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 paid added that they viewed the deal as a “‘nice to have’ at the right price, not a ‘must have’ at any price”.
In his own statement, David Ellison, chairman and CEO of Paramount, 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.”
The battle between Netflix and Paramount to acquire WBD has raged over the winter. In December, Netflix and WBD agreed a deal worth $82.7 billion to acquire WBD’s film and television studios, HBO Max and HBO.
Since then, Paramount has continued its attempts to muscle in with Ellison meeting regulators in the UK and Europe to persuade them his company would be a better option.
Should the Paramount deal be approved by regulators, the company will acquire all of WBD’s assets, including TNT Sports in the UK and CNN.
Commenting on the news, Mike Proulx, VP research director at analyst, Forrester, said, “Any concerns about Netflix owning Warner Bros. are only heightened by the prospect of Paramount owning all of WBD. But it might not even matter. Politics are playing an outsized role in this deal, and they’ve been on Paramount’s side from the get‑go. Even if Netflix hadn’t walked away, it was unlikely their deal would’ve made it through a politically charged regulatory process. Still, don’t declare a Paramount victory just yet — the drama around this deal is far from over.”
