Netflix has effectively dropped its mega $82.7 billion deal for Warner Bros. Discovery after refusing to counter Paramount Skydance’s “superior proposal”. The two entertainment giants have been in a bidding war in recent months, with Paramount’s latest bid worth $31 per share in cash. After Warner notified Netflix of the deal and asked for a counter offer, Netflix declined.
The streaming firm’s co-CEOs Ted Sarandos and Greg Peters said the deal was no longer financially attractive and said it would not match Paramount’s bid, effectively pulling the company out of the race. It paves the way for the acquisition of Warner by Paramount, subject to regulatory approval.
“We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the US,” read a statement from Sarandos and Peters. “But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Paramount will pay the $2.8 billion termination fee to end Netflix’s existing agreement. Bank of America Merrill Lynch, Citi and Apollo will provide a $57.5 billion debt commitment, while the Ellison Trust is providing a $45.7 billion equity commitment.
Future of Warner Bros. Games
Warner Bros. Discovery has a games division that includes studios such as Rocksteady, NetherRealm, TT Games, Avalanche Software and WB Games Montreal. It also includes famous IP such as The Wizard of Oz, Harry Potter, Game of Thrones and DC.
It’s not clear what the fate of the company’s games division will be post-acquisition. Netflix co-CEO, president and director Gregory Peters previously said the streaming firm didn’t attribute any value to the division in its $82.7bn bid.
“They’ve got great studios and great folks working there. So we think that there’s definitely an opportunity there. But just to be clear, we haven’t built that into our deal model,” he said.
This article was first published on PocketGamer.biz.
