Netflix pulls out of Warner Bros. bid Discovery, offers studios, HBO, and CNN to Ellison’s Paramount

With a series of deals being offered in the high tens of billions of dollars, the bidding war for Warner Bros. Discovery is over. David Ellison’s Paramount will buy Warner Bros. Discovery.

On Thursday, Warner Bros. Discovery announced that Paramount Skydance’s new offer of $31 a share was “the best offer,” giving Netflix four business days to counter. Netflix then said it would not raise its $82.7 billion bid for the legacy studio, and would walk away from the deal.

“The transaction we discussed would create shareholder value with clear regulatory approval,” Netflix CEOs Ted Sarandos and Greg Peters said in a statement Thursday. “However, we have been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we decline to match Paramount Skydance’s bid.”

According to the terms of the original agreement, Warner Bros. Discovery will have to pay a $2.8 billion severance fee to Netflix to end the existing deal. Paramount’s renewed offer – backed by the world’s sixth-richest person, Oracle’s executive chairman, and David Ellison’s father, Larry Ellison – includes paying that severance fee.

The new deal will see Paramount, which was bought last year by Ellison’s Skydance Media with a major investment from his father, acquire all of Warner Bros. Discovery, including its studios, HBO, its streaming service, its sports and entertainment divisions, and television networks such as CNN, TBS, TNT, Discovery, and HGTV.

Ellison, whose Paramount already owns major studio, entertainment, and media businesses, warned of major job cuts. His ownership of the CBS news network has also attracted controversy and has been widely seen as a sensitive turn to the Trump administration, with reporting critical of the administration sidelined or subject to more scrutiny by Ellison and CBS editor-in-chief, conservative lobbyist Bari Weiss. Larry Ellison is a major donor and supporter of President Trump.

Netflix had announced its intention to acquire WBD in December, offering about $83 billion for its studios and streaming service alone. Despite several aggressive takeover bids for Paramount, Warner Bros. Discovery also reassured shareholders of its belief that Netflix’s offer was better than Paramount’s, which offered $108 billion for the entire company including its television networks. Paramount’s new bid, of $31 a share, values ​​WBD at about $111 billion.

Paramount will assume $33 billion in debt held by Warner Bros. Discovery, according to the agreement. Larry Ellison, who has a net worth of $201 billion, according to Bloomberg, has agreed to provide more equity to fulfill Paramount’s bid. Paramount’s market cap is estimated at $12 billion.

The deal is also funded by a $57.5 billion debt commitment from Bank of America Merrill Lynch, Citi, and Apollo Global Management.

Shares of Netflix jumped as much as 10% in after-hours trading in New York. Shares in Paramount rose 4.5%.