Netflix ultimately withdraws Warner bid…raises the white flag to Paramount

Netflix jumps 13% in after-hours trading

Netflix’s bid to acquire Warner Bros. Discovery has ultimately fallen through. As rival Paramount–Skydance put forward a higher offer, Netflix stepped away from the takeover battle.

In a statement on the 26th (local time), Netflix said it would withdraw from the Warner Bros. bidding process, noting that “at the price level required to match Paramount’s latest proposal, the transaction is no longer financially attractive.”

Co-CEOs Ted Sarandos and Greg Peters said in a joint statement, “We believed we could be good stewards of Warner Bros.’ iconic brand,” but added, “This deal would be a good one at the right price—it does not need to happen at any price.”

The decision came shortly after Paramount submitted a revised proposal to acquire all of Warner Bros. at $31 per share (totaling $108.4 billion), and the Warner Bros. board judged the offer to be superior to Netflix’s existing bid.

As the incumbent bidder, Netflix had to amend its terms or withdraw within four business days. Netflix had previously signed an agreement in December last year to acquire Warner Bros.’ TV and film studios and its streaming unit (HBO Max) for $27.75 per share, valuing the deal at $72 billion.

Paramount’s revised offer also includes a $7 billion regulatory termination fee—meaning Paramount would bear the cost if the deal collapses due to regulatory issues. It also agreed to pay the $2.8 billion breakup fee that Warner Bros. would owe if its agreement with Netflix is terminated.

On the news, Netflix shares at one point surged 13% in after-hours trading. The move was interpreted as the market viewing positively Netflix’s decision to avoid a costly bidding war and an overextended acquisition.

Da-yeon Lim allopen@hankyung.com