Netflix shares jump 10% in afterhours after streaming giant opts out of Warner Bros. Discovery race

Streaming giant Netflix Inc. has decided to walk away from the deal to buy Warner Bros. Discovery after the latter's board deemed a revised bid by Paramount Skydance to be a superior offer. The stock surged 10% in extended trading on Wall Street on Thursday evening.

Paramount, earlier this week, revised its bid higher to buy Warner Bros. Discovery to $31 in cash from $30 previously, marking another amendment to the multiple offers it made in the past since Netflix first announced the deal. Netflix had announced the deal at $27.75 per share.

Netflix had last week granted Warner Bros. Discovery a seven-day waiver to reengage with Paramount, which resulted in the higher offer. Paramount's offer also is for WBD's pay TV networks CNN, TBS and TNT.

While Netflix shares surged in extended trading, those of Warner Bros. Discovery are down over 2%.

Paramount's bid also includes a $7 billion breakup fee if the merger does not win regulatory approval. It will also pay $2.8 billion as breakup fees that WBD owes Netflix as that deal is now in the dumps.

Netflix Co-CEOs Ted Sarandos and Greg Peters said that that the transaction they negotiated would have created shareholder value and a clear path to regulatory approval. "However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid," the statement added further.