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Warner Bros. CEO Discovery’s David Zaslav may have been counting on watching one final round of the Netflix vs. Paramount Skydance to acquire the media company he owns. What he probably didn’t expect was that Netflix wouldn’t even bother to re-enter the ring.
On Thursday after the market closed, WBD announced that Paramount Skydance’s final and best offer of $31 for a share of its film studio, broadcast platform and cable networks was higher than the bid received by Netflix of $27.75 for a share of the studio and broadcast property.
WBD’s announcement started a countdown clock: Netflix was given four business days to match or beat Paramount’s new bid, but after an hour and 10 minutes, Netflix left the field.
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WBD said Paramount Skydance’s final and best offer of $31 for a stake in its film studio, streaming platform and cable networks is higher than Netflix’s previously accepted bid of $27.75 for a stake in the studio and broadcast assets. Netflix CEO Ted Sa (Charley Gallay/Getty Images for Netflix/Getty Images)
In a joint statement, co-CEOs, Ted Sarandos and Greg Peters, said, “The transaction we negotiated would have created shareholder value with clear regulatory approval. However, we have been disciplined, and at the price required to match Paramount Skydance’s recent offer, the deal is no longer financially attractive to Paramount Skydance.”
Considering Sarandos’ tone in the final days of the process, the market should have been ready for a quick exit. In an interview on Feb. 20 on FOX Business’ “Claman Countdown,” Sarandos, when pressed on whether to match a potential bid for Paramount Skydance, seemed to take a page out of former Berkshire Hathaway CEO Warren Buffett’s “never overpay for a property no matter how much you want it” playbook.
Netflix was given four business days to match or beat Paramount’s new bid, but after an hour and 10 minutes, Netflix pulled out. (Photos by Mario Tama/Getty/Getty Images)
“We have been ethical consumers in our work. Our shareholders know us and expect us to continue doing what we do, which is to remain honest consumers,” Sarandos told FBN.
Netflix shareholders have not fully embraced the merger since the official bidding process began on November 20. Since then, Netflix shares have shrunk more than 19%.
| A ticker | Security | Finally | Change | change % |
|---|---|---|---|---|
| NFLX | Company NETFLIX INC. | 91.84 | +7,25 |
+8.57% |
| WBD | WARNER BROS. Company DISCOVERY INC. | 28.80 | -0.10 |
-0.35% |
| PSKY | PARAMOUNT SKYDANCE CORP. | 11.18 | +1.02 |
+ 10.04% |
Much of the concern centered on whether the $82.7 billion charge would shake Netflix’s already strong balance sheet, and whether the deal would be successful in regulation.
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Netflix shareholders have not fully accepted the merger since the formal bidding process began on November 20. (Photos by Mario Tama/Getty/Getty Images)
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On Thursday evening when WBD confirmed Paramount’s higher bid, Netflix shares saw a rally, rising nearly 10% in after-hours trading.
In their statement, the CEOs of Netflix indicated that they agree with the shareholders.
“This purchase has always been a ‘nice to have’ at the right price, not a ‘must have’ at any price,” said Sarandos and Peters.
