Netflix has pulled out of the bidding war for Warner Bros. Discovery (WBD), clearing the path for Paramount Skydance to take the lead in the high-stakes takeover battle.
The streaming giant had previously offered $27.75 per share for Warner’s studio operations and HBO Max streaming business, valuing those assets at roughly $83bn (£61.6bn), including debt.
However, Paramount Skydance tabled a higher, final offer of $31 per share for the entire WBD group, a proposal valuing the company at approximately $111bn (£82.4bn), including debt.
Although Warner’s board had continued to recommend Netflix’s proposal, it acknowledged on Thursday that Paramount’s bid now represented a “superior” offer marking the first sign of support for the previously hostile bidder.
Within hours of that assessment, Netflix confirmed it would not increase its bid, stating that the transaction was “no longer financially attractive.”
Co-CEOs Ted Sarandos and Greg Peters said in a joint statement: “This was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Despite Netflix’s withdrawal, the takeover is not yet sealed. Warner’s board has not formally approved the Paramount offer, though CEO David Zaslav described the proposal as one that could create “tremendous value.”
Any deal would still require shareholder and regulatory approval. Competition concerns and potential political scrutiny are expected to feature prominently in the review process.
If successful, the merger would place major media assets including CNN and CBS News under a single corporate umbrella, intensifying debate about consolidation within the US news industry.
Paramount Skydance is chaired and led by David Ellison, son of billionaire Larry Ellison, who is backing the financing of the bid.
Investors responded swiftly to the developments. Netflix shares rose 8.5% in after-hours trading, reflecting relief that the company avoided a costly acquisition. Paramount’s stock climbed 6.2%, while WBD shares slipped nearly 2% to $28.80 below Paramount’s $31 offer price.
Analysts said Netflix’s decision signalled financial discipline rather than retreat, allowing investors to refocus on its profitability, pricing power and operational performance.
Should Paramount Skydance succeed, the combined group would unite two of Hollywood’s legacy studios, bringing together franchises such as Harry Potter, Superman, and Barbie with Paramount’s portfolio, including Top Gun and The Godfather, alongside the Paramount+ streaming platform.
For now, the bidding war appears settled but the regulatory and shareholder hurdles still stand between Paramount and one of the biggest media mergers in recent years.
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