Netflix just said it wouldn’t raise its bid for Warner Bros.
The decision comes two days after Paramount increased its offer from a hostile $30-per-share bid to $31 per share for all of Warner Bros. Discovery, including its cable networks like CNN and HGTV.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement. “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.”
Netflix stock surged by more than 9% in after-hours trading on the news.
Ellison, Paramount’s CEO, has relentlessly pursued WBD for months, even after the Netflix-Warner Bros. deal was announced. Paramount has made 10 official offers for the HBO parent company.
Regulatory rhetoric heats up
Paramount has framed itself as a better buyer for Warner Bros. than Netflix, which it characterizes as a streaming powerhouse that would wield unhealthy sway over competitors and consumers if it bought HBO and gained access to iconic IP like DC Comics’ Batman.
Netflix has argued it isn’t dominant because it competes with YouTube and other free streaming services, as well as traditional TV. The company has also said it would be a better caretaker of Warner Bros. by laying off fewer staffers than Paramount would, while creating more TV jobs in a Hollywood plagued by fewer productions.
Both Netflix and Paramount are angling for support from regulators and President Donald Trump.
While Trump remarked in December that Netflix’s market position “could be a problem” if it bought Warner Bros., he said in February that he’d remove himself from the process and let the US Department of Justice determine whether Netflix’s Warner Bros. bid was an issue.
A White House spokesperson told Business Insider in mid-February that the president “has great relationships with all parties in this potential transaction and remains neutral in this process with no preference” for Netflix or Paramount.
However, Netflix caught Trump’s ire days later, with the president saying that the streaming giant must remove board member Susan Rice “or pay the consequences.” Rice, a White House official during the Obama and Biden administrations, appeared on a podcast and criticized Trump and companies she believes chose to “take a knee” to the president.
Sarandos didn’t express concern about Trump’s comments, saying the Netflix-Warner Bros. tie-up is “not a political deal.” Sarandos attended meetings at the White House on Thursday, Politico reported, though it’s not clear whether he met with Trump.
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