Netflix (NASDAQ:NFLX) shares rose more than 9% in premarket trading, Friday after the streaming pioneer abandoned its pursuit of Warner Bros Discovery (NASDAQ:WBD), choosing capital discipline over a costly consolidation.
The withdrawal paves the way for Paramount Global (NASDAQ:PSKY) to acquire the studio’s prized film and television assets, sending Paramount shares up approximately 10%.
The conclusion of the months-long bidding war shifts the market’s focus toward the regulatory hurdles awaiting a Paramount-Warner Bros tie-up.
The deal is expected to face intense antitrust scrutiny in both the U.S. and Europe, including an active investigation already underway in California.
Warner Bros Discovery shares remained marginally lower on the news.
The winning bid, led by Paramount CEO David Ellison and backed by billionaire Larry Ellison’s Skydance consortium, reached $31 per share.
This revised offer eclipsed Netflix’s $27.75-a-share proposal, eventually forcing the streaming leader to concede.
In a statement to Reuters, Netflix confirmed its exit, noting that the escalating price had moved beyond "financially sound" levels.
"We've always been disciplined… the deal is no longer financially attractive," the company stated.
To seal the agreement, the Paramount-led group bolstered its financial commitments, including $45.7 billion in equity.
The consortium also increased the deal's termination fee to $7 billion, a move designed to signal certainty to Warner Bros shareholders amid the looming regulatory reviews.