Netflix ($NFLX) stock surged in after-hours trading Thursday after the company walked away from its deal to acquire Warner Bros. Discovery assets, leaving Paramount Skydance as the likely buyer in a deal valued at around $111 billion.
The WBD board declared Paramount’s revised bid of $31 per share in cash to be a “superior offer” over Netflix’s existing deal, which sat at $27.75 per share and covered only WBD’s studio and streaming assets.
NETFLIX $NFLX DECLINES TO RAISE OFFER FOR WARNER BROS. pic.twitter.com/4SmV8oxopP
— Wall St Engine (@wallstengine) February 26, 2026
Netflix had four business days to revise its proposal. It chose not to.
“The deal is no longer financially attractive,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement. “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
The market seemed to like the discipline. Netflix stock climbed roughly 10% in extended trading.
Last week, Netflix had actually handed WBD a seven-day waiver to re-engage with Paramount, giving shareholders a cleaner look at all their options. Sarandos told CNBC at the time the move was about providing “complete clarity and certainty.”
It ended up clearing the path for its own exit.
Paramount’s $31-per-share all-cash offer covers the entirety of WBD — not just the studio and streaming side, but also CNN, TBS, TNT, HBO Max, Food Network, and a range of sports rights.
That’s a much bigger footprint than what Netflix had agreed to buy.
Paramount also agreed to absorb the $2.8 billion breakup fee WBD owed Netflix, and put up a $7 billion breakup fee of its own in case the deal doesn’t clear regulators.
WBD CEO David Zaslav called it a deal that would “create tremendous value” for shareholders once the board formally votes to adopt the merger agreement.
Paramount Skydance CEO David Ellison said the offer delivers “superior value, certainty and speed to closing.”
The deal is far from done. California Attorney General Rob Bonta said Thursday that the merger “is not a done deal,” citing an open investigation by the California Department of Justice.
The deal would also need approval from the U.S. Department of Justice and European regulators.
Paramount’s financial backing — including ties to tech billionaire Larry Ellison and early involvement from Jared Kushner’s investment firm Affinity Partners — has drawn scrutiny over political connections to the Trump administration.
Kushner’s firm stepped back in December. But questions around the deal’s political dimensions haven’t fully gone away, particularly around CNN, which Trump has repeatedly criticized and said should be sold as part of any WBD transaction.
CNN head Mark Thompson emailed staff Thursday urging them not to “jump to conclusions about the future until we know more.”
Netflix stock was up roughly 10%, WBD was down around 2%, and Paramount gained about 5% in after-hours trading Thursday.
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