Posted in: Current News, Movies, Netflix, TV | Tagged: netflix, paramount, Warner Bros

Netflix Declines Raising Warner Bros Bid; Clearing Path for Paramount

Netflix announced that it will not raise its bid offer for Warner Bros Discovery, clearing the path for David Ellison's Paramount Skydance.

UPDATE: Shortly after the Warner Bros. Discovery (WBD) board announced that David Ellison's Paramount Skydance now has the "Company Superior Proposal" to Netflix's standing agreement with WBD, the streamer wasted little of the four business days it had to offer a revised bid to announce that Netflix "has declined to raise its offer." Here's a look at the statement:

Netflix, Inc. today announced that it has declined to raise its offer for Warner Bros. Netflix had earlier received notice from Warner Bros. Discovery (WBD) that its Board of Directors has determined Paramount Skydance's (PSKY) latest proposal constitutes a "Superior Proposal" under the terms of WBD's existing merger agreement with Netflix. Netflix issued the following statement in response from 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.

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 entertainment 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.

ORIGINAL REPORT: Earlier today, Warner Bros. Discovery's (WBD) board announced that the revised offer from David Ellison's Paramount Skydance is now considered a "Company Superior Proposal." Ellison had this to say in a statement: "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." Here's a brief overview of the details, followed by what's next:

• Paramount increased its bid to $31 per share in cash (with a daily ticking fee of $0.25 per quarter beginning after September 30th, 2026).
• $7 billion regulatory termination fee payable by Paramount if a Paramount/WBD deal is blocked due to government regulation.
• Paramount would cover the $2.8 billion termination fee that WBD would have to pay if the Netflix deal were terminated,
• "An obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by PSKY's lending banks."
• A revised "Company Material Adverse Effect" that would exclude how WBD's Global Linear Networks business was performing, strengthening WBD's position while limiting Paramount's options to terminate or renegotiate terms.

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