Netflix has decided not to raise its acquisition offer for Warner Bros. Discovery, paving the way for a rival bid from Paramount Skydance.
The decision came after the streaming company deemed the deal no longer financially attractive.
Netflix co-CEOs Ted Sarandos and Greg Peters said they declined to match Paramount's latest offer after the Warner Bros. board
declared Discovery the "Superior Proposal" under the terms of the existing merger agreement.
Without a counteroffer from Netflix, the Warner Bros. Discovery board now has the room to terminate the previous agreement and continue negotiations with Paramount. The development has the potential to reshape the US media landscape if the deal is finalized.
Paramount's latest offer sets the purchase price at $31 per share in cash, up one dollar from the previous bid, valuing Warner Bros. Discovery at around $108 billion.
In addition, Paramount offered a regulatory termination fee of $7 billion if the deal fails to close due to regulatory factors.
Paramount also agreed to pay a $2.8 billion breakup fee that Warner Bros. Discovery would have to pay to Netflix if the original deal was canceled.
The structure of the offer is seen as giving the board additional confidence in considering regulatory risks.
If the acquisition is successful, major assets including the CNN news network will be under the control of the Ellison family.
The development is expected to attract political attention in Washington, especially after the issue of President Donald Trump's administration's influence on the direction of the media industry has also become an open discussion.
Overall, Netflix's decision to withdraw marks a turning point in this high-profile bidding war, with the focus now shifting to the approval process and potential regulatory implications of the media giants' merger.
