Netflix (NFLX) Stock Jumps as It Drops Warner Bros. Discovery (WBD) Bid

TLDR

• Netflix walked away from its deal to buy Warner Bros. Discovery assets after the WBD board deemed Paramount Skydance’s revised $31-per-share offer superior.
• Paramount raised its bid from $30 to $31 per share in cash, covering the full company including CNN, HBO, and pay-TV networks.
• Netflix declined to match the price, calling the deal “no longer financially attractive” at that level.
• Paramount agreed to pay the $2.8 billion breakup fee WBD owed Netflix, plus a $7 billion breakup fee if its own deal falls through.
• Netflix stock jumped ~10% in after-hours trading; WBD fell ~2%, Paramount gained ~5%.

Netflix ($NFLX) stock surged in after-hours trading Thursday after the company walked away from its deal to acquire Warner Bros. Discovery assets, leaving Paramount Skydance as the likely buyer in a deal valued at around $111 billion.

Netflix, Inc., NFLX

The WBD board declared Paramount’s revised bid of $31 per share in cash to be a “superior offer” over Netflix’s existing deal, which sat at $27.75 per share and covered only WBD’s studio and streaming assets.

Netflix had four business days to revise its proposal. It chose not to.

The market seemed to like the discipline. Netflix stock climbed roughly 10% in extended trading.

Last week, Netflix had actually handed WBD a seven-day waiver to re-engage with Paramount, giving shareholders a cleaner look at all their options. Sarandos told CNBC at the time the move was about providing “complete clarity and certainty.”

It ended up clearing the path for its own exit.

What Paramount Gets

Paramount’s $31-per-share all-cash offer covers the entirety of WBD — not just the studio and streaming side, but also CNN, TBS, TNT, HBO Max, Food Network, and a range of sports rights.

That’s a much bigger footprint than what Netflix had agreed to buy.

Paramount also agreed to absorb the $2.8 billion breakup fee WBD owed Netflix, and put up a $7 billion breakup fee of its own in case the deal doesn’t clear regulators.

Paramount Skydance CEO David Ellison said the offer delivers “superior value, certainty and speed to closing.”

Regulatory Hurdles Ahead

The deal would also need approval from the U.S. Department of Justice and European regulators.

Paramount’s financial backing — including ties to tech billionaire Larry Ellison and early involvement from Jared Kushner’s investment firm Affinity Partners — has drawn scrutiny over political connections to the Trump administration.

Kushner’s firm stepped back in December. But questions around the deal’s political dimensions haven’t fully gone away, particularly around CNN, which Trump has repeatedly criticized and said should be sold as part of any WBD transaction.

Netflix stock was up roughly 10%, WBD was down around 2%, and Paramount gained about 5% in after-hours trading Thursday.

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