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Netflix has declined to raise its offer for Warner Bros. Netflix had earlier received notice from Warner Bros. Discovery (WBD) that its Board of Directors has determined Paramount Skydance’s latest proposal constitutes a“Superior Proposal” under the terms of WBD’s existing merger agreement with Netflix, as the company has claimed in a statement.

Co-CEOs Ted Sarandos and Greg Peters affirm that although their transaction “would have created shareholder value with a clear path to regulatory approval”, and after Paramount’s latest 0ffer, “the deal is no longer financially attractive”.

Sarandos and Peters share their gratitude towards David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board “for running a fair and rigorous process”.

“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 U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price”, they note.

Paramount

On the other hand, Paramount’s $31 per share, all-cash proposal to acquire WBD is a “Company Superior Proposal” under the terms of WBD’s merger agreement with Netflix.

David Ellison, Chairman and CEO of Paramount, declares: “We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing”.

This includes:

• Paramount will acquire WBD for $31.00 per WBD share in cash for 100% of the company;
• A daily “ticking fee” of $0.25 per quarter will accrue after September 30, 2026, until the consummation of the Paramount transaction;
• A regulatory termination fee of $7 billion would be payable in the event the transaction does not close due to regulatory matters;
• Paramount will pay the $2.8 billion termination fee which WBD is required to pay to Netflix to terminate its existing Netflix merger agreement;
• Paramount will eliminate WBD’s potential $1.5 billion financing cost associated with its debt exchange offer;
• The “Company Material Adverse Effect” definition excludes the performance of WBD’s Global Linear Networks business;
• The Ellison Trust is providing a $45.7 billion equity commitment, and Larry Ellison is guaranteeing such commitment, including an obligation to contribute additional equity funding to Paramount to the extent needed to support the solvency certificate required by Paramount’s lending banks, and
• Bank of America Merrill Lynch, Citi and Apollo are providing a $57.5 billion debt commitment.