Netflix declines to raise bid for Warner Bros., paving the way for Paramount to triumph
Netflix said Thursday evening that it was declining to increase its offer for Warner Bros. Discovery, effectively ending the streaming platform’s pursuit of the studio and ensuring that Paramount’s improved bid of $31 per share would emerge victorious.
Netflix is up almost 9% on the news in premarket trading on Friday, while Paramount is up more than 8%, too, as of 4:15 a.m. ET.
In a statement, Netflix co-CEOs Ted Sarandos and Greg Peters said “this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
The Warner Bros. Discovery board said Thursday afternoon that it had determined Paramount’s latest bid constitutes a superior proposal to the $83 billion agreement it has with Netflix.
Before Netflix’s announcement Thursday evening, the Netflix-Warner Bros. merger had remained in effect, and Netflix had a four-business-day window to amend its deal to match or beat Paramount’s. The streamer’s announcement effectively eliminates that waiting period and allow Paramount’s offer to move forward.
Netflix’s statement that it is pulling out of the race allows the Warner Bros. board to terminate its merger agreement with the streamer.
It had been reported that Netflix had ample cash to increase its offer for Warner Bros., but in not doing so, it appears that Netflix management saw its share price increase in the wake of Paramount boosting its bid, and took to heart the strong signal from its own investors that they weren’t exactly rooting for it to make the purchase.
Earlier on Thursday, Warner Bros.’ announcement boosted Paramount’s odds on prediction markets to end up in control of the company. As of 4:40 p.m. ET on Thursday, event contracts speculating on which company would ultimately come out on top of the bidding war had Paramount at a 62% chance over Netflix’s 33% odds.
(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)
In a statement, Netflix co-CEOs Ted Sarandos and Greg Peters said “this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
The Warner Bros. Discovery board said Thursday afternoon that it had determined Paramount’s latest bid constitutes a superior proposal to the $83 billion agreement it has with Netflix.
Before Netflix’s announcement Thursday evening, the Netflix-Warner Bros. merger had remained in effect, and Netflix had a four-business-day window to amend its deal to match or beat Paramount’s. The streamer’s announcement effectively eliminates that waiting period and allow Paramount’s offer to move forward.
Netflix’s statement that it is pulling out of the race allows the Warner Bros. board to terminate its merger agreement with the streamer.
It had been reported that Netflix had ample cash to increase its offer for Warner Bros., but in not doing so, it appears that Netflix management saw its share price increase in the wake of Paramount boosting its bid, and took to heart the strong signal from its own investors that they weren’t exactly rooting for it to make the purchase.
Earlier on Thursday, Warner Bros.’ announcement boosted Paramount’s odds on prediction markets to end up in control of the company. As of 4:40 p.m. ET on Thursday, event contracts speculating on which company would ultimately come out on top of the bidding war had Paramount at a 62% chance over Netflix’s 33% odds.
(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)
