Netflix Shares Jump Nearly 10% After Deal with Warner Bros. Discovery Collapses
Netflix shares jumped nearly 10% in after-hours trading to above $92, after the streaming giant declined to increase its offer for Warner.
Quick overview
- Paramount has raised its bid for Warner Bros. Discovery from $30 to $31 per share.
- Netflix shares rose nearly 10% after the company decided not to increase its offer for Warner Bros. Discovery.
- In December, Netflix had previously outbid Paramount with a deal at $27.75 per share but has now opted out of a higher bid.
- Netflix executives stated that the deal was not financially attractive at the price required to match Paramount's latest offer.
Paramount improved its bid to acquire all of Warner Bros. Discovery, raising its offer from $30 to $31 per share.
Netflix shares jumped nearly 10% in after-hours trading to above $92, after the streaming giant declined to increase its offer for Warner Bros. Discovery, following the company’s board decision to label the new Paramount Skydance bid as a “superior proposal.” Netflix shares had closed Thursday’s session on Wall Street at $84.59.
In December, Netflix had outbid Paramount and struck a deal to acquire Warner Bros. Discovery’s studio and streaming businesses for $27.75 per share. This week, however, Paramount improved its proposal to purchase all of Warner Bros. Discovery, including its struggling cable TV operations, increasing the offer from $30 to $31 per share.
Netflix walks away from a higher bid
Warner Bros. Discovery controls the rights to the DC Comics superhero library, the film and television rights to Harry Potter, and HBO, which remains one of the leading brands in premium television. Despite the strategic value of these assets, investors had been skeptical about Netflix’s plan to acquire the studio and its streaming division, both because of the high cost and because it would have pushed Netflix into areas such as theatrical distribution — outside its core business model. Netflix shares had fallen sharply after the original deal was announced.
“The transaction we negotiated would have created value for shareholders, with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement. “However, we have always been disciplined, and at the price required to match the latest Paramount Skydance offer, the deal is no longer financially attractive, so we declined to match it.”
The executives added: “This transaction was always a ‘nice-to-have’ at the right price — not a ‘must-have’ at any price.”
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