After several days of bidding war, Netflix has walked out of its agreement with Warner Bros after refusing to raise its offer to match with rival studio Paramount. With this, the latter is set to win the months-long battle for acquiring Warner Bros. Discovery.
The noted studio was put up for sale last year and Netflix, who was one of the frontrunners in the bidding war, stepped out of the race after Paramount submitted a "superior" offer.
Following their exit, Netflix co-CEOs Ted Sarandos and Greg Peters said, "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,” they added. “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 US But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price."
Paramount's CEO David Ellison was among the first to pitch in the bidding war following its successful merger with Skydance in August. However, all his offers were rejected and WB opened up the formal auction process which attracted bids from Paramount, Netflix, Comcast and another company whose name has not been revealed.
The studio later launched a hostile offer after WBD locked an agreement with Netflix. The latter was reportedly wanting to know Paramount’s "best and final" offer before finalising their deal with them. The two studios are now working on a written agreement to complete formalities which would need approval by WBD shareholders.
The current move had a major effect on the stock markets, causing the company's shares to increase by nine per cent after the news was made public.
When Paramount takes over Warner Bros, it would mark a significant shift in the studio and media world as they would not just acquire the legendary studio, but also its films and media networks, including CNN which has been critical of US President Donald Trump and his policies.