Netflix exits bidding war; Paramount shares jump..

Netflix shares jumped more than 9% in premarket trading on Friday after the streaming giant said it would exit the fight for Warner Bros Discovery, while Paramount rose about 10% on winning the race for some of the world's most prized TV and film assets.

The end of the months-long bidding war shifted attention to the significant antitrust scrutiny a potential Paramount-Warner Bros tie-up would face in the United States and Europe, including an active investigation in California. Warner Bros shares were marginally lower.

Paramount Skydance pressed ahead with its pursuit of Warner Bros, launching a hostile campaign to wrest the prize from Netflix. It drew Warner Bros back to the negotiating table last week with a revised $31-per-share bid, topping Netflix’s $27.75 offer for the studio and streaming assets.

Netflix confirmed to Reuters that the price required to remain in the contest had risen beyond what it considered financially prudent and that it would withdraw from the takeover battle.

“We’ve always been disciplined … the deal is no longer financially attractive,” the company said.

“The bid always looked like a mix of offence and defence – shoring up content and scale, while keeping competition from gaining any edge, but at a very high price,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

“For now, at least, the market seems to be pricing this as a win for everyone,” he added.

In the contest for Warner Bros, the Paramount-led consortium, backed by billionaire Larry Ellison and headed by his son, Paramount CEO David Ellison, also raised its termination fee to $7 billion and expanded financing commitments, including $45.7 billion in equity.

Analysts at Morningstar said Paramount could benefit from favourable regulatory precedent in the United States, noting the Department of Justice had previously allowed consolidation among major studios when Disney acquired Fox.