Warner Bros. Discovery’s board favoured Paramount Skydance’s $31 per share offer for the whole company over Netflix’s $27.75 per share studio-streaming bid. The Thursday decision followed Paramount’s raise from $30 per share.
Netflix allowed a seven-day extension for talks, then declined to counter.
WBD CEO David Zaslav said, “Netflix is a great company and throughout this process Ted, Greg, Spence, and everyone there have been extraordinary partners to us. We wish them well in the future.” He named Netflix’s Ted Sarandos, Greg Peters, and Spencer Neumann.
“Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders. We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”
Netflix shares rose 10 per cent after hours, Paramount 5 per cent, WBD fell 2 per cent. Paramount added breakup fees.
Netflix co-CEOs stated, “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.”
“Paramount had been making a ton of noise, flooding the zone with confusion for shareholders, including floating all these hypothetical offers and talking directly to the shareholders and bypassing the Warner Bros. Discovery board. So we’ve given the opportunity to get those shareholders exactly what they deserve, which is complete clarity and certainty,” Sarandos told CNBC.
Netflix added, “Warner Bros. is a world-class organisation, 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.”