The bidding war for Warner Bros. Discovery has ended after a flurry of deal offers in the low tens of billions of dollars. Paramount, owned by David Ellison, acquires Warner Bros. Discovery.
On Thursday, Warner Bros. Discovery said Paramount Skydance’s latest offer of $31 per share was an “excellent offer” and gave Netflix four business days to respond. Netflix then announced that it would not raise its $82.7 billion all-cash bid for Legacy Studios and would withdraw from the deal.
“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 Thursday. “However, we remain disciplined and decline to match Paramount Skydance’s bid as this transaction is no longer financially attractive at the price required to match Paramount Skydance’s latest offer.”
Under the terms of the original deal, Warner Bros. Discovery would have to pay Netflix a $2.8 billion termination fee to terminate its existing agreement. Paramount’s new offer is backed by Larry Ellison, the world’s sixth richest man and the father of Oracle’s executive chairman, David Ellison, and includes paying for the deal.
The new deal would see Paramount acquire the entire Warner Bros. Discovery company, which was acquired last year by Ellison’s Skydance Media with significant financial backing from Ellison’s father, including the studio, HBO, streaming services, games and entertainment division, and terrestrial television networks including CNN, TBS, TNT, Discovery and HGTV.
Mr. Ellison warned that Paramount, which already owns major studio, entertainment and news businesses, would face significant job cuts. His ownership of the news network CBS has also been controversial, with reporting critical of the Trump administration being shelved and facing intense scrutiny from Ellison and CBS editor-in-chief and conservative firebrand Bari Weiss, seen as a move sympathetic to the Trump administration. Larry Ellison is a major donor and supporter of President Trump.
Netflix announced its intention to acquire WBD in December, offering nearly $83 billion for the studio and streaming service alone. Despite several hostile bids by Paramount, Warner Bros. Discovery has reassured shareholders that it believes Netflix’s offer is better than Paramount, which offered $108 billion for the entire company, including its terrestrial TV networks. Paramount’s latest bid was $31 per share, valuing WBD at approximately $111 billion.
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Under the agreement, Paramount will assume approximately $33 billion in debt held by Warner Bros. Discovery. Larry Ellison, who has a net worth of $201 billion, has agreed to supply additional stock to satisfy Paramount’s bid, according to Bloomberg. Paramount’s market capitalization is approximately $12 billion.
The deal is also funded by $57.5 billion in debt guarantees from Bank of America Merrill Lynch, Citi and Apollo Global Management.
Netflix stock rose as much as 10% in after-hours trading in New York. Paramount stock rose 4.5%.
