Netflix backs away from offer to buy Warner Bros. after Paramount submits revised bid

Netflix shares ​jumped sir thomas more than niner per cent premarket on fri as investors cheered its conclusion to leave the fight for Warner Bros Discovery, while Paramount rose about 10 per cent on winning the race for some ‌of the world's most prized TV and film assets.

Netflix on Thursday signalled it was backing away from its offer to buy Warner Bros. Discovery's streaming and studio assets, saying ‌the deal was no longer financially attractive after Paramount Skydance revised its offer for the coveted Hollywood studio to a $31-a-share offer.

"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," Netflix said in a statement.

Warner Bros. Discovery said ⁠earlier in the ⁠day that Paramount's revised $31-a-share offer was ‌superior to its existing deal with Netflix.

Netflix had earlier this month granted Warner Bros. A seven-day waiver to seek a "best and final offer" from Paramount for the company.

Netflix, which was looking to buy ⁠Warner Bros.' streaming and studio assets, agreed in December to a deal valued at $27.75 per share. The company had said its offer, along with a ‌planned divestiture of Warner Bros.' cable assets, would deliver a greater shareholder value.

In its revised bid, Paramount raised the termination fee it would pay should the deal fail to gain regulatory approval to $7 billion US from $5.8 ​billion US.

Paramount said it welcomed the Warner Bros. Board's unanimous reaffirmation that its bid represents the stronger ⁠offer.

The Ellison Trust is committing $45.7 billion US in equity, up from $43.6 billion US previously, ⁠backed by Larry Ellison and including any additional funds needed to satisfy ⁠Paramount's bank ⁠solvency requirements, the firm ​said.

Bank of America Merrill Lynch, Citi and Apollo are providing $57.5 billion US in ​debt financing, increased from ⁠an earlier $54 billion US commitment.

Paramount CEO David Ellison is the son of Larry Ellison, co-founder, executive chairman and chief technology of Oracle. The bid will face antitrust scrutiny in Washington, though the Ellisons have ties to President Donald Trump, who has spoken favourably about the merger.

California's Attorney General Rob Bonta could attempt to challenge the deal.

"These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in ⁠our review," he said in a statement.

TD Cowen analysts said in a note that in addition to Bonta, "we think there is potential for European regulators to have a say as well."

Paramount's merger with Warner Bros would unite two major Hollywood studios, two streaming platforms (HBO Max and Paramount+) and two ‌news operations (CNN and CBS).

Ellison's Oracle also now has a 15 per cent stake in TikTok, after the popular shot video app's Chinese owner, ByteDance, finalized a deal to set up ​a majority American-owned joint venture company to avoid a U.S. Ban.

Netflix made its announcement after CEO Ted Sarandos visited the White House earlier in the day, though he didn't see Trump, according to CNN and CNBC reports. The president was angered by political comments made recently by Netflix board member Susan Rice and demanded the streamer fire the former Obama administration official.

"This is a business deal, it's not a political deal," Sarandos said in comments to BBC on Monday about Trump's demand.

Democratic Senators Elizabeth Warren, Bernie Sanders and Richard Blumenthal ⁠have worried approval of the deal could be tainted by political favouritism.

"What did Trump officials tell the Netflix CEO today at the White House?" Warren, of Massachusetts, said on X. "Looks like crony capitalism with the president corrupting the merger process in favour of the billionaire Ellison family."

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