Netflix lost the fight for Warner Bros Discovery (WBD), but will still receive a $2.8 billion termination fee from Paramount Skydance (PSKY), which won the long fight by sweetening its offer. In a statement sent to the US Securities and Exchange Commission (SEC) this Friday, the 27th, Netflix reported that Warner Bros. Discovery notified the company that it had terminated the merger agreement in accordance with its terms, in order to enter into a merger agreement and plan with Paramount, in relation to the company’s superior proposal.
“Concurrent with the termination of the Merger Agreement and the execution of said agreement between WBD and PSKY, PSKY, on behalf of WBD, paid Netflix the termination fee of US$2,800,000,000 in accordance with the terms of the merger agreement,” the Netflix statement said.
Warner Bros. Discovery has agreed to be acquired by Paramount Skydance in a $110 billion deal signed Friday morning, according to an audio excerpt from a global company meeting reviewed by Reuters.
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On Thursday, Netflix announced its refusal to increase its offer for Warner Bros. On Tuesday, the 24th, Warner had informed that it would give a four-day deadline for Netflix to respond, after its board of directors determined that Paramount Skydance’s revised offer could reasonably result in a “superior proposal from the company”.
Paramount’s revised proposal contemplated an increased purchase price to $31.00 per WBD share in cash, plus other items. The deal, which still needs to be approved by Warner’s board and regulatory bodies in the US and Europe, has the potential to redesign the global entertainment and streaming market.
Netlfix shares soared 14% around 5:45 pm (Brasília time) on the New York Stock Exchange and Paramount gained 20%. Warner Bros gave up 2.12%, after gaining 132% in six months.
