Netflix has declined to raise its offer to purchase Warner Bros. Discovery's streaming business and studio, claiming the transaction was "no longer financially attractive" and effectively leading to Paramount's takeover of the company.

“We believe we would have been strong stewards of Warner Bros.′ iconic brands,” Netflix’s co-CEOs Ted Sarandos and Greg Peters said in a joint statement obtained by the Associated Press. “But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

Sarandos was in Washington, D.C. on Thursday (February 26) in an effort to save the deal amid growing antitrust concerns. The Netflix CEO reportedly attempted to mollify increased antitrust concerns of the company's plans to layer Warner Bros. Discovery's streaming service over its own as the deal would merge the No. 3 and No. 1 streaming platforms, as well as have Netflix acquire Warner Bros. Discovery's studio, while Republican lawmakers were hesitant to give the company more power due to recent comments made by Susan Rice, the former national security chief for former President Barack Obama, warning corporations not to "take a knee" to the Trump administration, vowing they would be "held accountable" if the Democrats reclaimed power.

Paramount Skydance added to its proposal to takeover Warner Bros. Discovery by including a $0.25 per share "ticking fee" for current shareholders for each quarter the transaction hasn't closed beyond December 31, 2026, as well as an agreement to pay the $2.8 billion breakup fee for its already announced deal with Netflix, according to a letter to Warner Bros. Discovery's board obtained by the New York Post last Tuesday (February 10). Paramount, which previously offered a $30 per share all-cash deal, pledged to fully reimburse a potential $!.5 billion in debt financing if incurred in the letter to the board.

On February 17, Warner Bros. Discovery said a Paramount representative was also willing to up its offer to $31 per share if it engaged in meaningful deal discussions after previously accusing WBD of not giving it a fair chance to compete with Netflix's offer. Netflix issued a statement obtained by the New York Post in which it said it was giving Warner Bros. Discovery a seven-day waiver to engage with Paramount Skydance.

“This does not change the fact that we have the only signed, board-recommended agreement with WBD, and ours is the only certain path to delivering value to WBD’s stockholders,” Netflix said.

Paramount Skydance CEO David Ellison previously extended a January 21 deadline for Warner Bros. Discovery shareholders to accept his "hostile" takeover offer last month, but didn't change the previously announced $30-a-share price, despite Warner Bros. Discovery announcing its agreement with Netflix. Warner Bros. Discovery previously announced it had agreed to sell its studios and streaming business at $27.75 per share.

Netflix had previously made a cash-and-stock offer to purchase Warner Bros. Discovery in December before Paramount Skydance made a $77.9 hostile takeover bid, which was ultimately rejected earlier this month. The revised $72 billion deal also led to Warner Bros. Discovery publicly releasing new financial disclosures on its subsidiaries, which allows investors a better glimpse into the business they would retain as part of the transaction.

In December, Warner Bros. Discovery's board unanimously urged shareholders to reject Paramount Skydance's hostile takeover bid and showed full support of the previously proposed Netflix merger. Paramount had since amended its bid to include a guarantee from Oracle founder Larry Ellison, the father of David Ellison, had agreed to personally back $40.4 billion of the equity financing for the deal as a way to counter Warner Bros. Discovery's public questioning that Paramount's earlier financing assurances were inaccurate.

But the Warner Bros. Discovery board compared Paramount Skydance's proposal to a leveraged buyout in the letter to shareholders in January, pointing out that Paramount is a smaller company and, therefore, “to effect the transaction, it intends to incur an extraordinary amount of incremental debt — more than $50 billion — through arrangements with multiple financing partners." Warner Bros. Discovery claimed that that structure “poses materially more risk for WBD and its shareholders,” including the possibility of the whole takeover plan falling apart, compared with the “certainty of the Netflix merger."

Paramount announced its plan to go directly to shareholders with an all-cash offer said to be worth $30 per share, equating to $108.4 billion in enterprise value, which exceeds the previously announced $27.75 per share deal Warner Bros. Discovery announced it had reached with Netflix on December 5.

"WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company," David Ellison said in a press release. "Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion. We believe the WBD Board of Directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process. We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares."

Democrat lawmakers threatened to block Paramount Skydance's hostile takeover bid of Warner Bros. Discovery, claiming it received backing from Saudi, Qatari and United Arab Emirates sovereign wealth funds, as well as the President Donald Trump's son-in-law Jared Kushner's private equity firm, posing a national security threat. Reps. Sam Liccardo of California and Ayanna Pressley of Massachusetts sent a letter to Warner Bros. Discovery's board and Treasury Secretary Scott Bessent on December 10, raising concerns over the potential risks of foreign entities gaining control of the American entertainment conglomerate.

“Future Congresses … will review many of the decisions of the current administration, and may recommend that regulators push for divestitures, which would undermine the strategic logic of this merger,” the letter states via Semafor. “We urge the Board to weigh these national security and regulatory liabilities in evaluating a transaction burdened by uncertain but potentially extensive mitigation obligations, foreign influence risks, or adverse regulatory action.”

The filing claims that the three Middle Eastern sovereign wealth funds and Kushner's firm “agreed to forgo any governance rights — including board representation — associated with their non-voting equity investments.”

Netflix previously announced that they entered a "definitive agreement" to acquire Warner Bros. Discovery, Inc., which includes its film and television studios, HBO Max and HBO, on Friday. The total enterprise value is approximately $82.7 billion, with an equity value of $72 billion and cash and stock valued at $27.75 per share, pending approval as one of the most sweeping and consequential mergers in modern Hollywood's history.

Warner Bros Discovery announced it was up for sale in a news release shared in October. The company said it was undergoing a "review of potential alternatives" and had received "unsolicited interest from multiple parties" for purchase.

Warner Bros Discovery's board of directors said it would evaluate strategic options, "which will include continuing to advance the Company's planned separation to completion by mid-2026, a transaction for the entire company, or separate transactions for its Warner Bros. and/or Discovery Global businesses," according to the news release.

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