Netflix Withdraws Warner Bros Bid as Paramount Raises Offer

Netflix, Inc. has signaled its withdrawal from the pursuit of Warner Bros Discovery's streaming and studio assets, citing a lack of financial viability following a sweetened rival bid. The move comes as Paramount Skydance Corporation Class B Common Stock revised its offer to $31 per share, a significant increase that has reshaped the battle for one of Hollywood's most prominent media empires. The Paramount Skydance proposal features an all-cash tender offer of $31.00 per share, complemented by a ticking fee of 25 cents per share for each quarter the deal remains unclosed after September 30, 2026. This represents a 147% premium over the undisturbed stock price of Warner Bros Discovery, surpassing the 121.3% premium offered by Netflix's previous $27.75 per share bid. While Netflix projected annual cost savings of $2 billion to $3 billion, the Paramount Skydance merger is expected to generate more than $6 billion in cost synergies. Financing for the Netflix bid was structured with up to $59 billion in debt via Wells Fargo & Company, BNP Paribas, and HSBC Holdings plc. In contrast, the Paramount Skydance offer is fully financed by $45.7 billion in equity from the Ellison family and $57.5 billion in debt commitments from Bank of America Corporation, Citigroup Inc., and Apollo Global Management, Inc.. Additional capital is being provided by the Public Investment Fund of Saudi Arabia, the Qatar Investment Authority, and the Limad Holding Company PJSC based in the United Arab Emirates. The political landscape in the United States has also factored into the merger discussions. Former President Donald Trump commented on the situation in a February interview, noting his decision to remain neutral despite being contacted by both parties. > "I must say, I guess I'm considered to be a very strong president. I've been called by both sides. It's the two sides, but I've decided I shouldn't be involved. The Justice Department will handle it." Previously, Trump had offered praise for the leadership at Netflix. > "Netflix is a great company. They've done a phenomenal job. Ted is a fantastic man… They have a very big market share and when they have Warner Bros., you know, that share goes up a lot so, I don't know." The assets at the center of the deal include the entire Warner Bros Discovery portfolio, featuring its film and television studios, HBO, CNN, and the HBO Max streaming service. While Netflix maintains a dominant market position with over 325 million subscribers and a market capitalization of $349.17 billion, the Paramount Skydance entity would combine a vast content library with 79.1 million subscribers. The enterprise value of the Paramount Skydance bid is estimated at $111 billion, compared to the $82.7 billion valuation of the Netflix offer. Under the terms of the revised deal, Paramount Skydance has also agreed to cover the $2.8 billion breakup fee that Warner Bros Discovery would owe Netflix.