Paramount wins bidding war for Warner Bros after Netflix walks away

Nora Redmond

Fri, 27 February 2026 at 8:22 am GMT+9 4 min read

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Paramount’s proposal values Warner Bros at around $112bn (£83bn). - Mike Blake /Reuters

Paramount has won the bidding war for Warner Bros, after its 11th-hour bid prompted rival Netflix to pullout.

Netflix on Thursday night walked away from a $83bn deal for Warner Bros after Paramount, controlled by the billionaire Ellisons, convinced the Hollywood studio to back a rival deal.

Warner Bros Discovery (WBD) said its board of directors had concluded that a $31-a-share offer from Paramount constituted a “superior proposal” to the Netflix transaction.

The streaming giant was given four working days to make its own counter offer. However, shortly after Netflix said it would back out of the deal instead.

Co-chief executives Ted Sarandos and Greg Peters said in a joint statement: “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.

“We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the US. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

Netflix shares climbed 10pc higher after the announcement was made.

It marks a stunning victory for billionaire Larry Ellison and his son David, who runs Paramount. The Ellisons, close allies of Donald Trump, have been building a media empire in recent years and had seen acquiring Warner Bros as a key part of their plans.

Paramount has been seeking to derail the Netflix bid since the start of the year, making unsolicited counter offers and stressing the regulatory risks involved in the current deal.

Netflix had agreed to an $83bn takeover of Warner Bros. - Mario Tama/Getty Images North America

Earlier in the week Warner Bros, the studio behind the Harry Potter franchise and recent hits including Sinners, had signalled that it was minded to endorse the latest Paramount bid.

The Los Angeles-headquartered company’s latest proposal values Warner Bros at around $112bn (£83bn) and includes a promise to pay a $2.8bn termination fee triggered by walking away from the Netflix deal.

The offer also includes a “ticking fee” of $0.25 per share for every quarter the deal doesn’t close and a $7bn termination fee if the transaction does not gain regulatory approval.

David Ellison, chairman and chief executive of Paramount, said on Thursday night: “We are pleased WBD’s Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing.”

Paramount said the Ellison Trust would provide $45.7bn of equity towards the deal, backstopped by Mr Ellison’s tech billionaire father Larry. Bank of America Merrill Lynch, Citi and private equity giant Apollo have agreed to provide $57.5bn of debt.

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Shares in Paramount rose just more than 5pc in after-hours trading and Warner Bros Discovery shares fell 2pc.

Last December, Netflix agreed a deal to pay $27.75 per share for the Warner Bros’s studio business along with the HBO Max streaming service, known for shows such as Succession and White Lotus. The transaction would see Warner Bros’s cable business, which includes channels such as CNN, spun off as a separate business.

By contrast, Paramount’s offer is for the whole company.

The US Department of Justice (DOJ) had launched a review into the Netflix takeover amid concerns that combining two major streaming services – Netflix and HBO Max – would hand the company too much power.

Netflix had downplayed concerns, though acknowledged that the review could drag for a year and a half.

It had criticised the involvement of Saudi Arabia, the United Arab Emirates and Qatar in Paramount’s bid, highlighting free speech restrictions in the Gulf states. Paramount insists the Gulf states will not have governance rights.

Both sides have been lobbying in Washington to garner support for their bids.

Mr Ellison, the Paramount chief, attended Donald Trump’s State of the Union address as a guest of Republican Senator Lindsey Graham earlier this week.

Separately, CNBC reported Netflix chief Ted Sarandos visited the White House on Thursday to discuss the takeover with President Trump.

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