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Paramount’s $31‑Share Offer Takes Lead After Netflix Walks Away

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Netflix withdrawal clears Paramount as sole bidder On 26 February 2026 Netflix announced it would not raise its $27.75‑per‑share offer, calling the price “no longer financially attractive,” and effectively exited the bidding war [3][4][5][6][7][8][9][10]. Paramount’s Skydance‑backed proposal raised its cash bid to $31 per share and added a $7 billion regulatory termination fee plus an accelerated “ticking‑fee” clause [3][5][8][9][10]. Warner Bros. Discovery’s board labeled the Paramount proposal a “company superior proposal” and voted to recommend it, while keeping the Netflix offer on the table [3][8][9]. The decision triggered a roughly 10 % after‑hours rise in Paramount’s shares and a 9 % bounce in Netflix’s stock [5].

Paramount seeks full Warner portfolio The $31‑per‑share bid covers Warner’s entire asset base—including HBO Max, CNN, Discovery Channel Group, DC Studios, the Harry Potter franchise and other legacy film titles—aiming to merge them with Paramount’s CBS, Paramount+ and film library [3][5][8][9][10]. Netflix’s earlier offer targeted only the studio and streaming assets, valuing them at $27.75 per share and excluding the cable networks [3][12]. By acquiring the whole company, Paramount would control two of the five remaining legacy Hollywood studios and a suite of news and sports properties [6][9]. Analysts note the combined entity could become a direct rival to Netflix, Disney+ and Amazon Prime Video [2][5].

Financing leans on Larry Ellison’s fortune and sovereign debt David Ellison, backed by his father Larry Ellison’s estimated $200 billion wealth, is financing the acquisition through a mix of new debt and equity from foreign sovereign‑wealth funds [1][7][10][11]. The transaction values Warner at roughly $110‑$111 billion including debt, representing a six‑fold size increase over Paramount’s market cap [7][11]. Paramount pledged to cover the $2.8 billion breakup fee owed to Netflix if the deal collapses, and to assume a “ticking‑fee” of $0.25 per share for each quarter past the September deadline [7][8][9]. The heavy leverage has drawn regulatory scrutiny over potential financial stability risks [6][11].

Regulatory and political scrutiny intensifies The U.S. Department of Justice opened an antitrust review, while California Attorney General Rob Bonta warned the merger is “not a done deal” and highlighted an ongoing state investigation [3][4][6][7]. Senate hearings featured criticism from Sen. Elizabeth Warren, who warned the deal could become an “antitrust disaster” and increase political influence over outlets like CNN [4][5]. Connections to former President Donald Trump—through Larry Ellison’s support and David Ellison’s meetings at the White House—have added a political dimension to the review [1][5][10]. Regulators in the EU and UK are also expected to assess the competitive impact of consolidating two legacy studios and major news networks [2][11].

Projected $6 billion synergies accompany layoff risk The merger is projected to generate $6 billion in cost savings, primarily through consolidating studio operations, streaming platforms and back‑office functions [2][4][5]. Analysts warn that achieving those synergies could require “thousands” of job cuts across the combined companies [2][5]. Netflix argued the full Warner‑Paramount combination would threaten competition and employment, a point echoed in its Senate testimony [4]. If approved, the deal would reshape the media landscape, creating a conglomerate that could rival Disney and Amazon in both content creation and distribution [2][5].

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Timeline

Oct 2025 – Warner Bros. Discovery announces it is up for sale after “multiple expressions of interest,” setting the stage for a high‑stakes bidding war among major media groups [5].

Dec 5 2025 – Netflix unveils a $82.7 billion cash‑and‑stock deal to acquire Warner’s studio and HBO Max at $27.75 per share, pledging to keep theatrical releases intact and to spin off the cable assets into a new “Discovery Global” company [25][28].

Dec 7 2025 – President Donald Trump calls Netflix co‑CEO Ted Sarandos “fantastic” and “incredible” but warns the merger could give Netflix excessive market share, signalling political scrutiny [24].

Dec 8 2025 – Paramount launches an all‑cash hostile takeover bid for Warner at $30 per share, valuing the company at $108.4 billion and bypassing Warner’s board, with CEO David Ellison emphasizing the cash advantage over Netflix’s mixed offer [21][20].

Dec 9 2025 – A consumer class‑action suit is filed to block Netflix’s $72 billion acquisition, alleging antitrust harm by eliminating HBO Max as a rival [17]; simultaneously Paramount Skydance files a hostile bid for the whole company, and President Trump says he will be “involved” in the regulatory review, highlighting the political dimension [18][19].

Dec 10 2025 – Analysts note Paramount’s bid would rank among the four largest hostile takeovers in two decades, underscoring the deal’s historic magnitude [16].

Dec 16 2025 – Warner’s board unanimously recommends rejecting Paramount’s $108.4 billion offer and supporting Netflix’s $27.75‑per‑share proposal, citing clearer funding and lower regulatory risk [5].

Dec 17 2025 – Warner reiterates that the Netflix agreement is “in the best interest of stockholders,” while Paramount’s bid is labeled “inferior” and “not superior” [5].

Dec 22 2025 – Paramount announces that Larry Ellison will personally guarantee $40.4 billion of equity for its $78 billion bid, bolstering financing credibility [15].

Jan 7 2026 – Warner’s board urges shareholders to reject Paramount’s updated offer, calling it “inferior” and risky due to heavy debt, and reaffirms support for the Netflix transaction announced in early December [4].

Jan 20 2026 – Netflix revises its proposal to an all‑cash offer of $27.75 per share, adding the value of Discovery Global shares and securing board approval to speed the shareholder vote, while Paramount Skydance files a lawsuit demanding disclosure of its competing bid [3][26].

Jan 29 2026 – Warner confirms that CNN is “not for sale,” emphasizing the network’s strategic importance to the planned Discovery Global spin‑off and rejecting rumors of a sale to Barry Diller [13].

Feb 18 2026 – Warner obtains a seven‑day waiver from Netflix to discuss Paramount’s “deficiencies,” schedules a special shareholders’ meeting for March 20, and maintains that the Netflix deal offers “superior value and certainty” despite the ongoing proxy fight [11][12].

Feb 23 2026 – Netflix defends its $27.75‑per‑share bid, arguing it adds assets and jobs, while warning that Paramount’s $30‑per‑share “best‑and‑final” offer must be submitted by the end of Monday before a shareholder vote on Netflix’s proposal [2].

Feb 26 2026 – Netflix announces it will not raise its offer, calling a higher price “no longer financially attractive,” while Paramount lifts its bid to $31 per share, adds a $7 billion termination fee and a “ticking‑fee” of $0.25 per share per quarter, prompting Warner’s board to label Paramount’s proposal superior but keep the Netflix offer on the table [10][8][9][30].

Feb 27 2026 – Netflix formally withdraws, stating the deal is “not financially attractive,” and Paramount’s $31‑per‑share bid, backed by a $7 billion fee and heavy debt financing, is declared “superior” by Warner’s board, leading CEO David Zaslav to predict “tremendous value” and marking Paramount as the likely acquirer of Warner Bros. Discovery [7][1][6].

Future event: Mar 20 2026 – Warner schedules a special shareholders’ meeting to vote on the Netflix transaction, though the outcome is now uncertain after Netflix’s withdrawal and Paramount’s superior bid [11].

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