Netflix shares climbed over 10% in extended trading after the streaming giant declined to raise its bid for Warner Bros. Discovery’s studio and streaming assets. The decision paves the way for Paramount Skydance to pursue its higher offer for the entire company.
Board Deems Paramount Offer Superior
Warner Bros. Discovery’s board determined that Paramount Skydance’s revised proposal constitutes a superior offer. Paramount upped its bid to $31 per share in cash for the full company, topping Netflix’s $27.75 per share for select assets.4847
Netflix received four business days to match the bid but responded swiftly, stating the higher price made the transaction unviable. Co-CEOs Ted Sarandos and Greg Peters said: “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.”46
Company Statements and Next Steps
Warner Bros. Discovery CEO David Zaslav praised Netflix as “extraordinary partners” and expressed excitement over the potential Paramount merger, noting it “will create tremendous value for shareholders.” Paramount CEO David Ellison welcomed the board’s affirmation of their offer’s superior value.49
Paramount agreed to cover Netflix’s $2.8 billion breakup fee and included a $7 billion termination fee should regulatory hurdles arise. Any deal now faces antitrust scrutiny, given the combination of major studios, HBO, CNN, CBS, and Paramount+.47
Market Reaction and Strategic Implications
Investors cheered Netflix’s exit, with shares surging 8.5% to 10% after hours, rebounding from a one-third drop over six months. Paramount shares rose 5%, while Warner Bros. Discovery dipped 2%.4847
Sarandos and Peters emphasized Netflix’s robust growth, planning $20 billion in content investment and resuming share repurchases. The move underscores disciplined capital allocation amid a competitive media landscape.46
A successful Paramount acquisition would unite iconic franchises like Harry Potter, Batman, Game of Thrones, and Top Gun, reshaping Hollywood but sparking concerns over consolidation and job impacts.
