Paramount Skydance, led by David Ellison, a prominent figure in the tech industry and supporter of former President Trump, was set to acquire Warner Bros. Discovery on Thursday as Netflix opted not to increase its bid, marking the end of a significant media bidding battle.
The agreement will consolidate a range of media assets, including CNN, Nickelodeon, and HBO, under the leadership of Larry Ellison, the head of Oracle and an ally of the White House.
Netflix confirmed that it would not match Paramount’s improved offer after the Warner Bros. board deemed it a “Superior Proposal” within the framework of their existing merger deal with Netflix.
In a statement, Netflix expressed that the negotiated transaction would have delivered shareholder value and had a clear route to regulatory approval. However, due to financial considerations, Netflix chose not to match Paramount Skydance’s latest bid, as it was no longer economically feasible.
Emphasizing their commitment to being responsible custodians of Warner Bros.’ renowned brands, Netflix stated that their proposed deal would have enhanced the entertainment sector, safeguarded existing jobs, and created new employment opportunities in the United States.
With Netflix declining to counter, the Warner Bros. Discovery board now has the freedom to terminate their agreement with Netflix and move forward with Paramount.
Previously scheduled for March 20, the shareholder vote on the Netflix deal is now inconsequential, with attention shifting towards securing shareholder consent for the Paramount acquisition.
Paramount’s revised offer, presented on Monday, marked the culmination of a bidding war that attracted attention from the White House, where President Trump asserted his influence over the outcome.
A pivotal aspect of the proposal was Oracle founder Larry Ellison’s commitment to providing additional financial support, if necessary, to meet the solvency requirements set by Paramount’s lending institutions.
Larry Ellison, the father of Paramount CEO David Ellison, a prominent Hollywood producer, substantially funded his son’s acquisition of Paramount and subsequent bid for Warner Bros. Discovery.
Known for his longstanding relationship with Trump, Larry Ellison’s involvement in both Paramount and Netflix’s strategies aimed to garner favor from the White House.
During the deal deliberations, Republican lawmakers criticized Netflix for allegedly promoting content that supported transgender rights, an accusation vehemently denied by Netflix’s co-CEO Ted Sarandos.
Just before exiting the bidding war, Sarandos was spotted entering the White House for discussions with officials, excluding the president, according to CNBC reports.
Paramount’s offer also involved funding from the sovereign wealth funds of three Middle Eastern nations — Saudi Arabia, Qatar, and Abu Dhabi — a factor that might trigger additional regulatory reviews.
The enhanced Paramount bid featured a cash purchase price of $31.00 per share, a dollar higher than its previous offer, valuing the company at approximately $108 billion.
Additionally, Paramount proposed a $7 billion regulatory termination fee in case the deal failed due to regulatory issues and agreed to cover the $2.8 billion breakup fee owed by Warner Bros. Discovery to Netflix if the merger did not proceed.
A combined Paramount-Warner Bros. entity would unite streaming services HBO Max and Paramount+, merging two major Hollywood film studios and consolidating ownership of CNN and CBS News under one umbrella.