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Netflix shares surge after Warner Bros bid dumped
(Sharecast News) - Netflix has walked away from its offer to buy Warner Bros Discovery, sending its shares higher and leaving Paramount Skydance as the likely winner in the long running battle for the iconic Hollywood studio. The streaming giant refused to increase its $83bn, $27.75-a-share offer after Warner Bros said Paramount's latest $31-a-share bid was superior.
"We've always been disciplined, and at the price required to match Paramount Skydance's latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid," Netflix co-chief executives Ted Sarandos and Greg Peters said in a statement.
Netflix's shares surged by almost 10% in after hours trading, indicating investors were relieved the company had not ended up overpaying for Warner Bros. The Reuters news agency cited an unnamed adviser as saying they had advised the streaming service to bow out of the bidding because the deal no longer made economic sense.
The adviser said Netflix was bidding against a billionaire who signalled that he was willing to pay a price viewed as irrational.
"There's no point in playing chicken with someone who won't turn the wheel," the source said, referring to billionaire Larry Ellison, co-founder, executive chairman and chief technology officer of Oracle and father of Paramount CEO David Ellison.
WBD had yet to formally endorse Paramount's latest proposal and any deal would still have to clear US and international regulatory hurdles.
If successful, Paramount would gain control of WBD's movie studio, home of franchises including Harry Potter, Superman and Batman, as well as the HBO streaming service, which owns Game of Thrones, The White Lotus and Succession.
It would also gain the CNN television news channel to go with its now right-leaning CBS news service. The Ellisons are friends of US President Donald Trump, who has made no secret of his hatred for CNN, which he frequently calls "fake news".
Reporting by Frank Prenesti for Sharecast.com
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