Paramount looks set to buy Warner Bros Discovery after Netflix declined to match its rival’s offer for the studio.
The streaming service had emerged as the preferred bidder back in December, beating Paramount which had spent months courting the Warner Bros Discovery board with a series of unsuccessful offers.
However Paramount refused to give up on its ambitions and launched a hostile bid for WBD.
Unlike Netflix, which just wanted the Warner Bros. studio and HBO streaming service, Paramount’s has been seeking to buy the entire Warner Bros Discovery business.
After several rounds of revised offers it finally found a formula that matched the WBD board’s demands earlier this week and which, after a period of consideration, the board today declared to be superior to the deal it had agreed with Netflix just two months ago.
In response to that announcement, Paramount Chairman and CEO David Ellison said: “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.”
Netflix was entitled to make a matching offer but, in a move that will be familiar to fans of the multiple shows it’s axed mid-run, it instead abruptly called time on its bid.
In a statement co-CEOs Ted Sarandos and Greg Peters said: “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval.
“However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
They added that the purchase of WBD “was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
The streamer has seen its share price fall in value since its interest in Warner Bros became public and its potential ownership of one of the major studios faced a wave of hostility from industry unions and cinema owners.
Senior figures also found themselves having to backtrack on years of calling into question the longevity and attractiveness of cinema as a means of film distribution amid concerns that they would curtail the length of time Warner Bros films were shown in cinemas in a bid to drive audiences to their service.
Following Netflix’s decision not to match Paramount’s latest offer, WBD president and CEO David Zaslav said: “Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders.
“We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”
Assuming the Paramount bid is cleared by regulators, the company will become the owners of a raft of brands, channels and digital offerings including HBO, CNN, the Warner Bros studio, DC comics characters such as Superman and Batman, and 50% of the UK TNT Sports venture which WBD co-owns with BT.