#USA #Hollywood #Netflix #Warner Bros #Paramount Skydance

Netflix Maintains Position on Warner Bros. Acquisition

In a recent announcement, Netflix, Inc. declared it will not modify its acquisition offer for Warner Bros. This decision follows a notification from Warner Bros. Discovery (WBD) indicating that a recent proposal from Paramount Skydance (PSKY) has been categorized as a 'Superior Proposal'. This classification arises under the current merger agreement held between Netflix and WBD, compelling Netflix to carefully reassess its strategic position.

According to co-CEOs Ted Sarandos and Greg Peters, the proposed arrangement would have significantly enhanced shareholder value while paving a straightforward route toward regulatory endorsement. However, they emphasized their disciplined approach to investment and revealed that matching the latest bid from Paramount Skydance renders the transaction financially untenable. As a result, Netflix has officially declined to engage in a bidding war for Warner Bros.

The leadership team at Netflix extended their gratitude to Warner Bros. for conducting a comprehensive and fair evaluation process. They further expressed confidence in their capability to serve as responsible caretakers of Warner Bros.' esteemed brand properties. Sarandos and Peters conveyed that the merger was always seen as a beneficial prospect guarded by cost considerations, rather than an essential transaction that must be maintained at any cost.

Highlighting Netflix's stable and flourishing operational framework, the co-CEOs noted their commitment to continue delivering high-quality content while organically expanding their services. With plans to invest approximately $20 billion in original films and series this year, Netflix is set to broaden its entertainment offerings even further. They also reassured investors that alignment with their capital allocation strategy will allow for the reinstatement of their share repurchase program.

The confidence expressed by Netflix in its intrinsic strength comes as the company reaffirms its dedication to engaging members, accelerating profitable growth, and ensuring long-term returns for its shareholders. Over the past two decades, Netflix has consistently prioritized these elements while maintaining its reputation as a public company.

As the competition with Paramount Skydance intensifies, this resolution indicates Netflix’s strategic discipline. Through this affirmation, Netflix remains resolute in its mission to innovate within the entertainment industry.

Important Information

As part of the ongoing discussions regarding the potential merger involving Netflix and Warner Bros. Discovery, a definitive proxy statement has been filed with the U.S. Securities and Exchange Commission (SEC). This document contains vital information relevant to the proposed transaction and must be read in conjunction with other filings made by both Netflix and WBD. Stockholders and interested parties are encouraged to consult the Proxy Statement and any relevant materials to stay informed about developments.

In summary, Netflix's decision not to engage in escalating bids for Warner Bros. reflects a keen awareness of market dynamics and internal fiscal health. While the proposed merger might have been advantageous, Netflix is adopting a strategic stance, ensuring that any future moves align with its financial goals and shareholder interests.