00:00In a stunning twist in one of Hollywood's biggest bidding wars, Netflix is officially
00:04stepping aside in the battle for Warner Brothers, clearing the path for David Ellison's Paramount
00:09Skydance to take control of the fabled studio. Netflix co-CEOs Ted Sarandos and Greg Peters
00:15announced Thursday that the company will not raise its offer, calling the deal, quote,
00:20no longer financially attractive. In a statement that executives emphasized that acquiring Warner
00:25Brothers was, quote, always nice to have at the right price, not a must have at any price. They
00:31added that while the negotiated transaction would have created shareholder value and had a clear path
00:36to regulatory approval, matching Paramount Skydance's latest bid simply didn't make financial sense.
00:43Sarandos and Peters also thanked Warner Brothers' discovery leadership, including CEO David Zaslav,
00:48calling the process fair and rigorous and saying Netflix would have been strong stewards of the
00:53studio's iconic brands. With Netflix out, Paramount's latest offer, valued at $31 per share,
00:59now appears poised for acceptance. The proposal includes several sweeteners, including a $0.25
01:04per quarter ticking fee beginning after September 2026 and a massive $7 billion regulatory termination
01:12fee if the deal collapses due to government intervention. Paramount has also agreed to cover
01:17the $2.8 billion breakup fee Warner Brothers would owe to Netflix for terminating their existing
01:22merger agreement. That means Netflix is expected to receive that $2.8 billion payment and Wall Street
01:28reacted swiftly, with Netflix shares surging more than 10% in after hours trading following the
01:34announcement. Still, the deal is far from finalized. U.S. and European regulators must approve the merger
01:40and state attorney generals are expected to weigh in. Already, political opposition is forming,
01:46with Senator Elizabeth Warren calling the proposed merger a, quote, antitrust disaster. Ellison could soon
01:52find himself testifying before Congress. So for now, the Warner Brothers bidding war appears to be over,
01:57but the fight may just be beginning. For more on this story, be sure to head over to
02:01thehollywoodreporter.com. This is The Hollywood Reporter News.
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