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Netflix has announced it will not raise its offer to acquire Warner Bros. Discovery. The decision clears the way for David Ellison-led Paramount Skydance, whose bid has been deemed superior by WBD’s board, to take over the entire company.
“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,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a press release.
Netflix’s decision to back out of the acquisition will put an end to the months-long bidding war between the streamer and Paramount Skydance. In December, Netflix announced a principal agreement with WBD to acquire the media mogul’s studios, HBO Max, and HBO for a stock-plus-cash deal valued at $82.7 billion.
Paramount then attempted a hostile takeover by making a $108 billion ($30 per share) offer directly to shareholders. Unlike Netflix’s bid, Paramount’s bid was for the entire company, including its Global Networks division.
Paramount later revised the offer to $31 per share, and WBD’s board deemed that a “Company Superior Proposal” on Thursday. The board gave Netflix four business days to improve its offer, but the streamer declined to raise its bid later the same day.
“This transaction was always a 'nice to have' at the right price, not a 'must have' at any price,” Sarandos and Peters said in their joint statement.
As things stand, Paramount Skydance has the leading bid. Under the terms of its proposal, Paramount will pay Netflix a $2.8 million breakup fee. Paramount will also pay a quarterly ticking fee of $0.25 per share after Sept. 30. If the deal collapses due to regulatory issues, Paramount would pay WBD a $7 billion fee.