In a flurry of deal offers within the high tens of billions of dollars, the bidding war for Warner Bros. Discovery is over. David Ellison-owned Paramount will acquire Warner Bros. Discovery.
On Thursday, Warner Bros. Discovery announced that Paramount Skydance’s newest offer of $31 a share was a “superior proposal,” giving Netflix 4 business days to counter. Netflix then said it could not raise its $82.7 billion all-cash bid for the legacy studio, and would walk away from the deal.
“The transaction we negotiated would have created shareholder value with a transparent path to regulatory approval,” said Netflix co-CEOs Ted Sarandos and Greg Peters in a press release Thursday. “Nevertheless, we’ve all the time been disciplined, and at the worth required to match Paramount Skydance’s latest offer, the deal is not any longer financially attractive, so we’re declining to match the Paramount Skydance bid.”
Per the terms of the unique deal, Warner Bros. Discovery could have to pay a $2.8 billion termination fee to Netflix to finish the prevailing agreement. Paramount’s renewed offer — backed by the world’s sixth-richest person, Oracle’s executive chair, and David Ellison’s father, Larry Ellison — includes paying that breakup fee.
The brand new deal will see Paramount, which was bought just last 12 months by Ellison’s Skydance Media with heavy financial backing from his father, acquiring everything of Warner Bros. Discovery, including its studios, HBO, its streaming service, its games and entertainment divisions, and linear television networks like CNN, TBS, TNT, Discovery, and HGTV.
Ellison, whose Paramount already owns major studios, entertainment, and news businesses, has warned of serious job cuts. His ownership of reports network CBS has also attracted controversy and has largely been seen as a sympathetic turn toward the Trump administration, with reporting critical of the administration shelved or facing increased scrutiny by Ellison and CBS’s editor-in-chief, the conservative provocateur Bari Weiss. Larry Ellison is a significant donor and supporter of President Trump.
Netflix had announced its intent to acquire WBD in December, offering nearly $83 billion for its studios and streaming service alone. Despite several hostile takeover bids by Paramount, Warner Bros. Discovery reaffirmed to shareholders its belief that Netflix’s offer was superior to Paramount’s, which offered $108 billion for the complete company including its linear television networks. Paramount’s newest bid, of $31 a share, values WBD at about $111 billion.
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Paramount will tackle the about $33 billion in debt held by Warner Bros. Discovery, based on the deal. Larry Ellison, whose net price is $201 billion, based on Bloomberg, has agreed to provide the extra equity to meet Paramount’s bid. Paramount’s market cap is about $12 billion.
The deal can also be being financed by a $57.5 billion debt commitment from Bank of America Merrill Lynch, Citi, and Apollo Global Management.
Netflix shares jumped as much as 10% in after-hours trading in Recent York. Shares in Paramount were up 4.5%.