Netflix Exits Warner Bros. Bid, Stock Rises
Netflix (NASDAQ: NFLX) has abandoned its bid to acquire Warner Bros. Discovery (NASDAQ: WBD), with Paramount Skydance winning the auction with a $111 billion offer, equating to $31 per share. This move comes after Netflix’s stock surged by 9% following the announcement on a Friday, recovering some value after previously declining by up to 25% when WBD accepted Netflix’s initial offer back in December.
Warner Bros. has significant challenges, including $33.5 billion in debt, which raised concerns regarding the strategic value of the acquisition for Netflix. Analysts suggest that Netflix’s success does not require Warner Bros.’ struggling assets and that media mergers historically face high failure rates—illustrating that this potential union lacked a clear justification.
With Paramount now owning Warner Bros., Netflix stands to benefit from reduced competition while also securing a $2.8 billion termination fee from Warner Bros. and Paramount.
