The battle for control of Warner Bros. Discovery (WBD) has taken a decisive turn, providing greater clarity for investors in Netflix. In a move that reduces the threat of a protracted bidding war, the WBD board of directors has officially advised its shareholders to reject a hostile takeover proposal from Paramount Skydance Corporation (PSKY). The board reaffirmed its commitment to the previously agreed merger with Netflix, a decision that significantly diminishes market uncertainty surrounding the future of the Hollywood studio.
Strategic Rationale and Market Reaction
The rejection of the PSKY offer shifts the market’s focus squarely onto the strategic merits of Netflix’s proposed acquisition. Gaining access to Warner Bros. Discovery’s vast content library, including the prestigious HBO catalog, is seen as a major competitive advantage in an increasingly fragmented streaming landscape. This consolidation would remove a large independent competitor and grant Netflix control over nearly a century of film and television history, enabling significant synergies in production, distribution, and global marketing.
In pre-market and early trading, Netflix equity showed stability with modest gains of 0.5% to 1.5%. This positive movement reflects the market’s perception of reduced transaction risk following the WBD board’s clear recommendation.
Deal Specifications and Timeline
The WBD board today reiterated its support for the merger agreement with Netflix, which was first announced on December 5, 2025. The key terms of the transaction are:
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- Offer Value: $27.75 per WBD share
- Total Enterprise Value: Approximately $82.7 billion
- Payment Structure: A combination of $23.25 in cash and $4.50 in Netflix stock for each WBD share
- Expected Completion: The deal is anticipated to close within 12 to 18 months, pending the receipt of necessary regulatory approvals.
Analyst Confidence and Price Target
Concurrent with these developments, Netflix received bolstering analyst support. The firm Jefferies & Company confirmed its positive stance on the stock.
- Rating: “Buy” reaffirmed
- Price Target: $134.00 per share
- Current Trading Level: Approximately $95 per share
James Heaney, the lead analyst, highlighted substantial upside potential. His assessment notes that Netflix is well-positioned to integrate WBD and that the board’s definitive rejection of the PSKY bid should alleviate concerns about a drawn-out and costly bidding contest.
Context of Recent Stock Split and Regulatory Path Forward
Netflix’s current share price in the mid-$90 range should be viewed in the context of its recent 10-for-1 stock split, executed in November 2025. This corporate action increased the number of shares outstanding without altering the company’s overall market capitalization, making the stock nominally more accessible to retail investors who trade in smaller quantities.
With the bidding war risk now receding, the primary focus for the merger shifts to the regulatory review process. The current stable to positive price action suggests that investors are assigning a high probability to the transaction’s successful completion, anticipating that the strategic benefits will outweigh regulatory hurdles.
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