Netflix Shares Hit 7-Month Low After Surprise Bid for Warner Bros
Netflix shares slumped to a seven-month low after unveiling an $82.7B offer for Warner Bros, as Paramount floated a higher bid and the White House reportedly questioned the merger.
Michael Reed
Netflix shares fell to a seven-month low on Monday after the company announced an $82.7 billion agreement to acquire Warner Bros., triggering an immediate wave of political scrutiny and a rival bid from Paramount.
The streaming giant said it would buy Warner Bros. at $27.75 per share, a deal that would reshape the U.S. entertainment landscape. But within hours, CNBC reported that Paramount was preparing a $30-per-share counteroffer and could take the proposal directly to Warner Bros. shareholders.
Market reaction was swift. Shares of Netflix slid as investors weighed the escalating bidding war and the high regulatory risk attached to the merger.
Regulatory pressure intensifies
U.S. media outlets reported that the White House views the Netflix–Warner Bros. combination with “significant skepticism” and may signal antitrust authorities to scrutinize or even block the merger. According to those reports, officials see Paramount — whose leadership maintains close ties to President Trump — as a more politically acceptable buyer.
The companies still need full regulatory approval before any deal can proceed. That process could stretch months.
Record breakup fee at stake
If Netflix fails to secure regulatory clearance or withdraws from the merger, it must pay Warner Bros. a $5.8 billion breakup fee — the largest ever seen in a U.S. media acquisition. Investors treated the clause as a major financial overhang.
“It’s an unusually heavy commitment for any company,” one M&A attorney said, speaking to U.S. media. “It puts real pressure on Netflix to push the deal through despite the political noise.”
What happens next
The market is preparing for a prolonged contest. Paramount’s interest could trigger a competitive bidding phase, while regulators may take months to issue a ruling. Until clarity emerges, analysts expect heightened volatility in Netflix shares.
The company declined to comment on political reports, adding only that it remains “committed to completing the transaction.”