Netflix backed out of offer to buy Warner Bros.

Netflix signaled Thursday it is backing out of its offer to buy Warner Bros. Discovery’s streaming and studio assets, saying the deal is no longer financially attractive after Paramount Skydance revised its offer for the coveted Hollywood studio to $31 a share.

Netflix shares rose nearly 10 percent in extended trading.

“We have 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 Paramount Skydance’s bid,” Netflix said in a statement.

Warner Bros. Discovery said earlier in the day that Paramount’s revised $31-per-share offer was better than its existing deal with Netflix.

Netflix earlier this month gave Warner Bros. a seven-day grace period to seek the “best and final offer” from Paramount for the company.

Netflix, which was looking to buy Warner Bros. The streaming and studio assets agreed to a deal in December worth $27.75 per share. The company had also announced its offering in conjunction with the planned divestiture of Warner Bros. Cable assets will deliver greater shareholder value.

In its revised bid, Paramount increased the termination fee to be paid from US$5.8 billion to US$7 billion if it failed to receive regulatory approval.

Paramount said it welcomed the unanimous reaffirmation of the Warner Bros. board that its bid represented a strong proposal.

The Ellison Trust, backed by Larry Ellison and including any additional funds needed to meet Paramount’s bank solvency requirements, is investing $45.7 billion US in equity, up from $43.6 billion previously, the firm said.

Bank of America Merrill Lynch, Citi and Apollo are providing US$57.5 billion in debt financing, up from an earlier US$54 billion commitment.

Activist investor Ancora Holdings, which has a minority stake in Warner Bros., has also increased pressure on the HBO owner, saying the company has not engaged closely enough with Paramount.