Warner Bros. Discovery $WBD ( ▲ 6.28% ) jumped as much as 7.5 percent in premarket trading before giving back most of the gains after reports that Netflix has secured the winning offer for the company at roughly $28 per share. Deadline reported that Netflix will now enter exclusive talks to acquire WBD’s streaming division and HBO Max, beating out Comcast and Paramount, which complained just yesterday about the fairness of the sales process.
Even though a recent report suggested that merging HBO Max with Netflix would not meaningfully expand Netflix’s market share, the streamer still appears ready to commit. Bloomberg noted that Netflix agreed to a $5 billion breakup fee if regulators block the deal.
It is far too early to know how a transaction of this scale might reshape the world’s largest streaming platform or the broader entertainment industry. For now, Netflix $NFLX ( ▼ 2.89% ) investors do not seem thrilled, with shares down slightly in early trading.