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(Reuters) - Paramount Skydance (PSKY.O)
emerged as the winner in a months-long battle to acquire Warner Bros Discovery (WBD.O), after streaming giant Netflix (NFLX.O) on Thursday refused to raise its bid for the storied Hollywood studio.
"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 said in a statement.
Netflix confirmed to Reuters that it was walking away from bidding for Warner Bros Discovery. The Warner Bros board still has to terminate the Netflix deal and adopt Paramount Skydance's offer.
"Once our board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders," Warner CEO David Zaslav said in a statement. "We are excited about the potential of a combined Paramount Skydance and Warner Bros Discovery and can’t wait to get started working together telling the stories that move the world."
Paramount maintained its dogged pursuit of Warner Bros, launching a hostile campaign to wrest the prize from Netflix. It managed to lure Warner Bros back to the bargaining table last week, with the potential of an increased cash offer for the company.
Earlier in the day, Warner Bros said Paramount's revised $31-a-share offer was superior to Netflix's bid of $27.75 per share for Warner Bros' streaming and studio assets.
A Netflix adviser, speaking on condition of anonymity, said they had recommended the streaming service should bow out of the bidding because the deal no longer made economic sense. Netflix co-CEO Ted Sarandos hinted that the streaming giant would not substantially raise its offer in a February 20 interview with Fox News' Liz Claman, where he emphasized that Netflix has been "very disciplined buyers."
The adviser said Netflix was bidding against a billionaire who signaled a willingness to pay a price for Warner Bros that Netflix viewed as irrational.
"There's no point in playing chicken with someone who won't turn the wheel," said the source, referring to billionaire Larry Ellison, co-founder, executive chairman and chief technology officer of Oracle and father of Paramount CEO David Ellison.
Netflix shares jumped more than 10% after it declined to raise its offer.
[1/2]A drone view shows the Netflix logo on one of the company's buildings in the Hollywood neighborhood in Los Angeles, California, U.S., January 20, 2026. REUTERS/Daniel Cole/File Photo Purchase Licensing Rights
REGULATORY CONCERNS
Paramount's merger with Warner Bros would unite two major Hollywood studios, two streaming platforms (HBO Max and Paramount+) and two news operations (CNN and CBS).
The Ellisons have ties to President Donald Trump. Still, the bid is likely to face antitrust scrutiny in Washington, foreign countries and U.S. states including California.
"Approval from federal regulators seems likely given the political environment; however, we think it is very likely that some state regulators - most notably, California Attorney General Rob Bonta - could attempt to challenge the deal. We think there is potential for European regulators to have a say as well," TD Cowen analysts said in a note.
Bonta, a Democrat, said late on Thursday that this is not a done deal. "These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review," he added.
States have the power to sue to block deals, though the DOJ has the most resources to do so.
Democratic Senators Elizabeth Warren, Bernie Sanders and Richard Blumenthal have worried approval of the deal could be tainted by political favoritism.
In its revised bid, Paramount raised the termination fee it would pay should the deal fail to gain regulatory approval to $7 billion from $5.8 billion. It also agreed to cover the $2.8 billion fee Warner Bros would owe Netflix for walking away from the merger agreement.
The Ellison Trust is committing $45.7 billion in equity, up from $43.6 billion previously, backed by Larry Ellison, who also agreed to provide additional funds needed to satisfy Paramount's bank solvency requirements, the firm said.
Bank of America Merrill Lynch, Citi and Apollo are providing $57.5 billion in debt financing, increased from an earlier $54 billion commitment.
Activist investor Ancora Holdings, which owns a small stake in Warner Bros and had stepped up pressure on the HBO owner to engage more with Paramount, welcomed the latest offer.
"Netflix's decision to not raise its offer of $27.75, less likely net debt adjustments, has paved the way for shareholders to receive meaningfully more cash and a truly viable path to government approvals," Ancora said in a statement. "This is a win-win for shareholders and the industry.”
Netflix (NFLX.O) on Thursday said it would not raise offer for Warner Bros Discovery (WBD.O) after the coveted Hollywood studio said Paramount Skydance's (PSKY.O) revised $31-a-share offer was superior to its existing deal with the streaming giant.
Here is a timeline from the founding of Time Inc and Warner Bros to the company's latest breakup and potential sale.
| Date | Event |
|---|---|
| 1923 | Warner Bros was founded by brothers Harry, Albert, Sam and Jack Warner as a film studio in Hollywood. It revolutionized cinema with the introduction of synchronized sound in films. |
| 1969 | Kinney National Company, a conglomerate that later transitioned into media, buys Warner Bros-Seven Arts and later spins off its non-media businesses. |
| 1972 | HBO is founded by Charles Dolan with backing from Time. It was the first U.S. subscription-based cable network, offering uncut, commercial-free movies and live sports, pioneering premium cable television. |
| 1990 | Time Inc merges with Warner Communications in a $14 billion deal, hailed as a "marriage of content and distribution", creating Time Warner, then the largest media company in the world. |
| 1996 | Time Warner merges with Turner Broadcasting, gaining Cartoon Network, CNN, TNT and a vast film library of classic films. |
| 2000 | Time Warner merges with AOL, forming AOL Time Warner, the largest merger in history at the time, aiming to marry traditional and digital media. |
| 2002 | AOL Time Warner merger begins to unravel as AOL's value collapses with the launch of an SEC investigation, prompted by allegations of accounting irregularities and inflated revenue reports at AOL. |
| 2003 | CEO Steve Case resigns from AOL Time Warner. |
| 2004 | Time Warner sells Warner Music to a private equity group led by Edgar Bronfman Jr. for $2.6 billion. |
| 2009 | Time Warner fully spins off Time Warner Cable, which had already been partially separated in 2007, ending its role in cable distribution. |
| 2009 | Time Warner spins off AOL. |
| 2013 | Time Warner spins off Time, its magazine division, which includes Time, People, Fortune and Sports Illustrated, marking its formal exit from publishing. |
| 2016 | AT&T announces acquisition of Time Warner for $85 billion. |
| 2018 | AT&T completes its acquisition of Time Warner after regulator approval, renaming it WarnerMedia. |
| 2021 | AT&T announces it will spin off WarnerMedia and merge it with Discovery Inc to create a new standalone media company. |
| 2022 | WarnerMedia and Discovery complete their merger in a $43 billion deal. |
| June 9, 2025 | Warner Bros Discovery announces it will separate into two companies — one focusing on streaming and studios businesses, while the second will house its cable TV assets. |
| October 21, 2025 | Warner Bros Discovery's board rejects a Paramount Skydance offer of nearly $60 billion, or $24 per share, a source familiar with the matter exclusively tells Reuters. The company says it is weighing a potential sale amid interest from several suitors. |
| November 18, 2025 | Warner Bros Discovery's board wants Paramount Skydance to sweeten its bid to $30 per share, valuing the company at $74.34 billion, Axios reports. |
| November 21, 2025 | Warner Bros Discovery receives preliminary buyout bids from Paramount Skydance, Comcast and Netflix — who were asked to improve their offers. |
| December 1, 2025 | Warner Bros Discovery receives a second round of bids, including a mostly cash offer from Netflix. |
| December 4, 2025 | Paramount Skydance accuses Warner Bros Discovery of running an unfair sale process that favors Netflix over other bidders, CNBC reports, citing a letter sent by the newly merged media company. |
| December 5, 2025 | Netflix is in exclusive talks to buy Warner Bros Discovery's film and television studios along with its streaming assets after offering $28 per share, a source says. |
| December 5, 2025 | Netflix agrees to buy Warner Bros Discovery's film and TV studios and streaming division for $72 billion, or $27.75 per share. |
| December 9, 2025 | Paramount Skydance makes a hostile bid for Warner Bros Discovery in a deal valued at $108.4 billion or $30 per share. |
| December 17, 2025 | Warner Bros Discovery's board rejects Paramount Skydance's hostile $108.4 billion bid, saying it failed to provide adequate financing assurances. |
| December 23, 2025 | Paramount Skydance amends its offer to buy Warner Bros Discovery to include a $40.4 billion personal guarantee from Larry Ellison. |
| January 7, 2026 | Warner Bros Discovery rejects Paramount Skydance's amended hostile bid despite Larry Ellison's guarantee. |
| January 12, 2026 | Paramount Skydance files lawsuit to force Warner Bros Discovery to disclose details of its deal with Netflix and plans to nominate directors to Warner Bros Discovery's board. |
| January 20, 2026 | Netflix amends its bid to an all‑cash offer for Warner Bros Discovery's studio and streaming units and secures unanimous approval from the Warner Bros board without increasing the $82.7 billion purchase price. |
| January 22, 2026 | Paramount Skydance extends its hostile tender offer for Warner Bros Discovery to February 20, seeking more time to win investors. |
| February 3, 2026 | U.S. senators grill Netflix co-CEO Ted Sarandos at a hearing over how the company's acquisition of Warner Bros Discovery would affect competition in the entertainment industry. |
| February 5, 2026 | U.S. President Donald Trump says he will stay out of the bidding war for Warner Bros Discovery, a reversal from his comments late last year. |
| February 10, 2026 | Paramount Skydance revises its $30-per-share all-cash offer for Warner Bros, adding a 25-cent-per-share fee for every quarter the transaction does not close beyond December 31, 2026. Paramount also says it will fund the $2.8 billion termination fee Warner Bros owes Netflix if the deal falls through. |
| February 17, 2026 | Warner Bros rejects Paramount's revised bid and gives the Hollywood Studio seven days to see if it can come up with a better deal to buy the owner of HBO Max and the "Harry Potter" franchise. |
| February 24, 2026 | Warner Bros Discovery says it is considering a sweetened bid from Paramount Skydance without disclosing the value of the deal. |
| February 24, 2026 | Warner Bros Discovery opens the door to Paramount after its CEO, David Ellison, raises the offer to $31 per share. |
| February 26, 2026 | Netflix refuses to raise its offer for Warner Bros after the coveted Hollywood studio said Paramount Skydance's revised $31-a-share offer was superior to its existing deal with the streaming giant. |
Reporting by Kritika Lamba, Meghana Khare, Anhata Rooprai, and Arnav Mishra in Bengaluru; Additional reporting by Manya Saini and Sneha S K; Editing by Leroy Leo, Arun Koyyur, Shinjini Ganguli, Pooja Desai, Tasim Zahid and Maju Samuel