Netflix shares leapt more than 9% in premarket trading after the company confirmed it would exit the prolonged contest to acquire Warner Bros Discovery assets. Paramount, part of a consortium that included Skydance and backing from billionaire Larry Ellison, gained roughly 10% as it emerged as the winning bidder for a package of prized television and film properties.
The end of the months-long bidding fight now places antitrust questions at the center of the story. Market participants and analysts pointed to looming regulatory review in both the U.S. and Europe, including an active investigation in California. Shares of Warner Bros Discovery were modestly lower on the news.
Paramount Skydance pursued Warner Bros persistently, mounting a hostile campaign aimed at displacing Netflix in the race. That strategy succeeded in forcing Warner Bros back into negotiations after the consortium raised its offer to a revised $31-a-share, topping Netflix’s $27.75 proposal for the studio and streaming assets.
Netflix said the price required to remain competitive had risen beyond what it viewed as financially defensible, confirming to Reuters that it would withdraw from the takeover battle. "We’ve always been disciplined… the deal is no longer financially attractive," the company said.
Market commentary framed the competing bids as having both offensive and defensive motives. "The bid always looked like a mix of offence and defence - shoring up content and scale, while keeping competition from gaining any edge, but at a very high price," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. "For now, at least, the market seems to be pricing this as a win for everyone."
Financial commitments from the Paramount-led group were also enlarged during the contest. The consortium increased the termination fee to $7 billion and expanded its financing commitments, which included $45.7 billion in equity contributions.
Analysts at Morningstar commented on the regulatory environment, saying: "In the U.S., we believe Paramount has a good enough relationship with the presidential administration to ease concerns, and the Department of Justice has set a precedent in overlooking the merger of major studios when Disney bought Fox." The remark highlights that antitrust scrutiny will be an important next phase for the transaction.
With Netflix stepping back and Paramount prevailing in the bidding, attention is likely to remain on how regulators in the U.S. and Europe evaluate the deal, what conditions might be imposed, and how the outcome will affect stakeholders across media, streaming and capital markets.
Key market moves:
- Netflix: jumped more than 9% premarket after withdrawal from the bidding contest.
- Paramount: rose about 10% on winning the bid for Warner Bros assets.
- Warner Bros Discovery: shares slightly lower amid deal conclusion and regulatory focus.