Update: Well, that didn’t take long. Netflix has released a statement saying it will not raise its offer for Warner Bros. Discovery, effectively giving Paramount the win.
Here’s the statement from Netflix co-CEOs Ted Sarandos and Greg Peters:
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.
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Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process. We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.Netflix’s business is healthy, strong and growing organically, powered by our slate and best-in-class streaming service. This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertaining offering. Consistent with our capital allocation policy, we’ll also resume our share repurchase program.
We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.
So, assuming everything goes as planned, Paramount Skydance will be the new owner of Warner Bros. Discovery. Did this play out like you thought it would? Let us know in the comments.
— Original article follows —
For a while, it felt like Netflix had the Warner Bros. Discovery deal in the bag, but recent days have seen the pendulum swing over to Paramount Skydance. In fact, the board of Warner Bros. Discovery released a statement saying Paramount’s latest offer is a “superior proposal” to Netflix’s existing offer.
Warner Bros. on Paramount’s New Offer
In a statement released today, Warner Bros. Discovery say it has “notified Netflix of its determination that the PSKY proposal constitutes a ‘Company Superior Proposal.’ Under the terms of the Netflix merger agreement, this notice triggers a four business day period during which Netflix has the right to propose revisions to the Netflix merger agreement so that the PSKY proposal would cease to constitute a ‘Company Superior Proposal.’ Following the conclusion of this period, if the Board determines in good faith, after consultation with its independent financial and legal advisors, that, after considering any revisions to the terms of the Netflix merger agreement proposed by Netflix, the PSKY proposal continues to constitute a ‘Company Superior Proposal,’ WBD would be entitled to terminate the Netflix merger agreement.“
The statement continues: “PSKY’s proposal includes a purchase price of $31.00 per WBD share in cash, plus a daily ticking fee equal to $0.25 per share per quarter beginning after September 30, 2026, as well as a $7 billion regulatory termination fee payable by PSKY in the event the transaction does not close due to regulatory matters, payment by PSKY of the $2.8 billion termination fee that WBD would be required to pay to Netflix to terminate the existing Netflix merger agreement, an obligation of Larry J. Ellison and an associated trust to contribute additional equity funding to the extent needed to support the solvency certificate required by PSKY’s lending banks, and a ‘Company Material Adverse Effect’ definition that excludes the performance of WBD’s Global Linear Networks segment.“
Netflix will have 4 business days to respond with a new deal, so we should hear something before March 4 at 11:59 p.m. ET.
Paramount Skydance chief David Ellison responded, saying, “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.“
Some Major Figures Oppose the Netflix Deal
Many folks in the entertainment industry have chimed in on the potential Netflix deal, including “humble movie farmer” James Cameron, who spoke out against the streaming service acquiring Warner Bros. “I believe strongly that the proposed sale of Warner Bros Discovery to Netflix will be disastrous for the theatrical motion picture business that I have dedicated my life’s work to,” he said.
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