Warner goes to Paramount after Netflix's unexpected decision

Plot twist in the battle for the future of Warner Bros. Discovery. Netflix has decided to withdraw from the race after the WBD board of directors deemed Paramount Skydance's latest proposal more advantageous.

The group led by Paramount has raised its offer to $31 per share entirely in cash, thus exceeding the $27.75 proposed by Netflix to acquire only the studio and streaming assets. The new proposal, however, concerns the entire scope of Warner Bros. Discovery, including pay-TV networks such as CNN, TBS, and TNT, and includes a maxi penalty of $7 billion in case of regulatory halt. Paramount has also committed to covering the $2.8 billion penalty that WBD would have had to pay Netflix in case of a failed agreement.

For Netflix, the economic conditions are no longer there

Despite having the opportunity to make a new offer within a few days, Netflix chose not to adjust its bid. Co-CEOs Ted Sarandos and Greg Peters reiterated the group's financial discipline, emphasizing that the operation was only interesting under certain economic conditions.

The market reacted decisively: Netflix shares rose 10% in after-hours trading, while Paramount gained 5%. Warner Bros. Discovery shares, however, fell. Now attention shifts to the definitive approval of the agreement and to possible regulatory obstacles that could influence the birth of a new entertainment giant.