"Netflix had the legal right to match the PSKY offer," the report read. They finally chose not to do it, as you are well aware. As of this morning, an agreement with PSKY has been struck as a consequence. That's the current situation," Bruce Campbell, the chief revenue and strategy officer at Warner Bros., stated during the town hall.
Requests for comment were not immediately answered by Warner Bros. or Paramount.
The deal ends a bidding war that began when Netflix refused to match Paramount's most recent offer of $31 per share, which Warner Bros. thought was better than the streaming pioneer's $27.75 per share offer for its studio and streaming assets.
Netflix's stock increased 13% and Paramount's stock increased 24% as investors applauded the company's decision to withdraw from the Warner Bros. competition. "EU Antitrist Approval Is Probably Not a Problem."
According to sources cited by Reuters on Friday, Paramount is expected to easily receive antitrust approval from the European Union, and any necessary divestitures are probably going to be small.
California State Attorney General Rob Bonta, however, has expressed disapproval of the merger, stating that the state is looking into the Paramount acquisition and will be "vigorous" in its examination. Among Hollywood's greatest media reorganizations, the purchase, which includes around $29 billion in debt, will establish one of the world's largest film studios and enable Paramount to access Warner's vast collection of intellectual property, which includes blockbusters like "Fantastic Beasts" and "The Matrix."
With the possible combination of HBO Max and Paramount+, it will also enable Paramount to strengthen its streaming initiatives, allowing it to compete with market leader Netflix and increase its market share.
Since late last year, Paramount has been actively pursuing Warner Bros. by continuously increasing its offer in an effort to take the company away from the streaming behemoth.
With the promise of a better cash offer, the company, headed by David Ellison, the son of billionaire Larry Ellison, lured Warner's board back to the negotiating table.
Paramount increased the termination fee in its updated proposal from $5.8 billion to $7 billion in the event that the merger is not approved by regulators.
In a regulatory filing on Friday, Netflix stated that Paramount had settled Warner Bros.' $2.8 billion termination fee.
Ancora Holdings, an activist investor with a minor position in Warner Bros., has also increased pressure on the owner of HBO to interact more with Paramount.
Lawmakers from both parties have expressed concern that any acquisition of Warner Bros. may leave customers with fewer options and higher costs.
Cinema owners are also worried that merging big Hollywood studios would result in employment losses and fewer films being shown in theaters.
Editing by Arun Koyyur and Shinjini Ganguli; reporting by Harshita Mary Varghese in Bengaluru and Karol Badohal in Poland; additional reporting by Jaspreet Singh in Bengaluru
