“The transaction we negotiated would be profitable for shareholders and provide a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement. “However, we have always maintained discipline, and at the price required to match Paramount's latest Skydance offeringthe contract is no longer financially attractive for us, so we decide not to match Paramount Skydance's offer“- they added.
The company's decision means that After months of efforts, Paramount Skydance has an open path to take over Warner Bros. Discovery (WBD), together with the company's television channels, including Polish TVN and CNN. On Thursday, WBD's management announced that Paramount's new offer was considered better than Netflix's.
According to Paramount CEO David Ellison, the decision was made unanimously. “We are pleased that the Management Board of WBD unanimously confirmed that our offer is extremely cost-effective, which translates into greater value for WBD shareholders, certainty and speed of finalizing the transaction,” he said. According to the provisions of WBD's agreement with Netflix to acquire the company, rival Paramount now had four days to improve its offer.
- Donald Trump called the head of Netflix on the carpet. Threatens consequences
Paramount offered to purchase the entire company for $31 per share (up $1 from the previous share) plus an additional 25 cents for each quarter of delay in closing the deal from October this year. Additionally the company promised to pay $2.8 billion to invalidate the contract with Netflix and $7 billion in compensation if the transaction is blocked by regulators.
This was the deal between Warner Bros. and Netflix
The agreement signed by Netflix with WBD in December last year provided for the purchase of the company for $27.75 per share, but excluding the portion that includes television channels such as CNN, TNT, MTV and Poland's TVN. Under the agreement, these channels would remain under the control of their current owners.
Paramount's offer concerns the purchase of the entire company and – according to media reports – was favored by the Donald Trump administration. Trump himself said that a possible transaction should lead to a change of ownership of CNN, which he accuses of bias. On Wednesday, Republican attorneys general of 11 states also spoke against the takeover of WBD by Netflix and asked the Ministry of Justice to block the transaction due to concerns about monopolization of the streaming platform sector.
- Warner Bros. Discovery with declining revenues. Media in crisis
Paramount Skydance is headed by David Ellison, the son of Trump-supporting billionaire Larry Ellison. Since Trump took power, the Ellisons' companies have taken control of Paramount, along with CBS, and are also part of the consortium that took control of American TikTok. In both cases, the owners were accused of interfering with the content to benefit the administration.
Meanwhile, Netflix CEO Ted Sarandos was scheduled to visit the White House on Thursday to talk about the transaction. Last week, Trump demanded that the company dismiss former adviser to President Obama, Susan Rice, from the Board of Directors. The reason was Rice's statement criticizing corporations that “bent the knee” under pressure from the White House.
