Warner Bros. Discovery CEO David Zaslav may have been counting on watching one last round in the Netflix vs. Paramount Skydance boxing match to acquire the media company he runs. What he might not have anticipated was that Netflix wouldn’t even bother re-entering the ring.
Thursday after the market close, WBD announced that Paramount Skydance’s last and best offer of $31 a share for its film studio, streaming platform and cable networks was superior to Netflix’s previously accepted bid of $27.75 a share for the studio and streaming assets.
WBD’s declaration started a countdown clock: Netflix was granted four business days to match or beat Paramount’s new bid, but just an hour and 10 minutes later, Netflix left the arena.
NETFLIX BACKS OUT OF WARNER BROS BIDDING WAR AFTER PARAMOUNT MADE ‘SUPERIOR’ OFFER
In a joint statement, the streamer’s 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.”
Considering Sarandos’ tone in the final days of the process, the market should have been ready for the quick exit. In an interview Feb. 20 on FOX Business’ “Claman Countdown,” Sarandos, when pressed as to whether he’d match a potentially higher bid by Paramount Skydance, seemingly took a page out of former Berkshire Hathaway CEO Warren Buffett’s “never overpay for an asset no matter how much you want it” playbook.
“We’ve been very disciplined buyers in our careers. Our shareholders know us and they expect us to continue to do what we do, which is remain a disciplined buyer,” Sarandos told FBN.
Netflix shareholders have never fully embraced the merger since the official bidding process began Nov. 20. Since then, Netflix shares have shriveled more than 19%.
Much of the concern focused on whether the $82.7 billion dollar cost might shake Netflix’s solid balance sheet, and whether the deal would pass regulatory muster.
NETFLIX CO-CEO ACCUSES JAMES CAMERON OF SPREADING ‘MISINFORMATION’ ABOUT WARNER BROS. ACQUISITION
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Thursday evening when WBD confirmed the superiority of Paramount’s bid, Netflix shares saw a relief rally, soaring nearly 10% in after-hours trade.
In its statement, Netflix’s co-CEOs intimated they agreed with shareholders.
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” Sarandos and Peters said.
