Introduction: Netflix shares jump after walking away from Warner Bros Discovery deal
Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.
Every good drama needs a few twists and turns. And the race for ownership of Warner Bros Discovery has certainly delivered.
Overnight, Netflix has walked way from the deal, declining to match a new, improved takeover offer from its rival, Paramount Skydance.
Netflix’s hopes were blown away by Paramount lifting its offer for the whole of Warner Bros to $31 per share, beating Netflix’s bid of $27.75 per share for Warner Bros’ streaming and studio assets.
Backing out of the bout, Netflix said:
double quotation mark“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.”
Netflix’s shares have surged by 8.5% in after hours trading, suggesting relief that the streaming company has not risked overpaying for Warner Bros.
Netflix’s shares had fallen by almost a third over the last six months.
This clears way for Paramount to win WBD’s assets, including Warner Bros, the studio behind franchises including Harry Potter, Superman and Batman, as well as HBO, home to shows including Game of Thrones, The White Lotus and Succession.
It would also give Paramount, owned by Larry Ellison (a friend of Donald Trump) ownership of CNN – he already controls rival news network CBS.
Any deal still need to win regulatory approval, though, so this may not be the final act in the Warner Bros Discovery story…..
The agenda
7am GMT: Sweden’s GDP report for Q4 2025
10.30am GMT: India’s GDP report
1pm GMT: Bank of England chief economist Huw Pill: Panellist at Elgin Advisory and Society for Professional Economists ‘UK & US economics’ webinar
1.30pm GMT: Canada’s GDP report for Q4 2025
1.30pm GMT: US producer prices inflation report for January
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Updated at 02.21 EST
Key events
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UK bond prices a little stronger
UK government bond prices are rallying too, showing the lack of market panic following the Gorton and Denton byelection.
This has pushed down the yield, or interest rate, on UK 10-year and 30-year bonds by two basis points (0.02 percentage points); a small move, but one that shows the UK’s cost of borrowing has dipped.
Mark Dowdin of RBC BlueBay Asset Management, says:
double quotation markIn the UK, the Labour Party suffered a humiliating defeat at the Gorton by-election. This outcome was largely expected, but the margin of defeat continues to heap pressure on Prime Minister Starmer.
Nevertheless, gilts have continued their recent outperformance, helped by an improving inflation narrative, which may also, in turn, benefit the outlook for UK government finances.
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FTSE 100 hits new high over 10,900 points
Meanwhile in London, the stock market has hit a new record high.
The FTSE 100 index of blue-chip shares has extended its run of record, rising over the 10,900-point mark for the first time to reach 10,914 points.
That takes its gains so far this year to over 9%.
Property portal Rightmove is the top riser, after announcing a share-buyback scheme, profits in line with expectations, and plans for a “Rightmove app-in-GPT on OpenAI in the near future”.
Mining stocks are also higher.
Susannah Streeter, Chief Investment Strategist at Wealth Club, says:
double quotation mark‘’The FTSE 100 is sailing ever higher on a big wave of enthusiasm for London listed stocks. The blue-chip index has opened at fresh record levels. It’s been on a breathtaking run upwards, accelerating its surge higher since the start of the year, rising by more than 9%. Momentum appears to be on its side with the psychologically important 11,000 mark now in its sights. Its mining constituents have been benefitting for demand for metals in particular, as signs indicate that a commodities super-cycle is underway, with huge demand for metals and minerals needed to power the green revolution and build AI infrastructure. Geopolitical tensions and rising debt levels are keeping demand for safe precious metals intact, while defence contractors continue to benefit from the big uplift in spending on military capabilities.
Rightmove topped the leaderboard in early trade, after its results enthused investors. It saw a 9% uplift in revenues as estate agents upped spend on the portal’s extra services to keep homebuyers engaged. Rightmove is trying to move with the times, by dramatically increasing spend on AI innovations. The scale of the spend, with a bulk of a £60 million investment due to be spent on the technology over the next three years, had caused jitters among shareholders. However, now that revenues are showing some signs of keeping up with the company’s ambitions, it’s helped quell some concerns.
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Paramount shares set to jump too
Paramount Skydance’s shares are also on track to rally today, after it saw off Netflix’s rival bid for Warner Bros.
Paramount is up 8.7% in pre-market trading, following a 10% jump on Thursday before Netflix decided not to raise its offer.
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Updated at 04.10 EST
A Paramount takeover of Warner Bros will be less disruptive for the industry than if Netflix had won the battle, argues Ben Barringer, head of technology research at Quilter Cheviot:
double quotation mark“For Paramount it has got the asset it always wanted and now probably feels like it is in a position to compete with Disney for that second spot behind Netflix when it comes to streamers. However, it has saddled itself with a lot of debt to get to this point and that will need to be paid off at some point – a fact Netflix was likely more than aware of. Meanwhile, for Warner Bros, it has managed to extract a huge amount of value from what was supposedly a depreciating asset.
“Ultimately, this outcome probably doesn’t shake the media industry out as much as if Netflix had been successful here. Yes, it creates a new mega streamer in whatever Paramount-Warner Bros becomes, but Netflix has eyes on other competitors. YouTube remains the biggest threat to Netflix’s dominance, and with this saga now over, it can focus on keeping its place at the top of the streaming tree.”
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The market reaction to Netflix walking away from Warner Brothers indicates all sides have done well, suggests Matt Britzman, senior equity analyst at Hargreaves Lansdown:
double quotation mark“The streaming takeover saga took a dramatic turn after Warner Bros. Discovery formally recognised Paramount Skydance’s offer as the superior bid, prompting Netflix to walk away almost immediately. After weeks of drama, meetings and speculation, Netflix’s decision to step aside brought an abrupt end to what had been one of the market’s most closely watched corporate chess matches. In the end, it underlined just how fast things can move when big money, regulators and strategic pride collide.
For Netflix investors, the reaction has been positive with shares 8.5% higher in after-hours trading. While there was clearly scope for Netflix to push higher, management chose discipline over empire‑building, removing a major acquisition overhang that had been weighing on the shares. The bid always looked like a mix of offence and defence – shoring up content and scale, while keeping competition from gaining any edge, but at a very high price – and with that risk now off the table, investors are free to refocus on Netflix’s core strengths: pricing power, margins and execution. For now, at least, the market seems to be pricing this as a win for everyone.”
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UK consumer confidence dips as unemployment fears rise
Tom Knowles
Consumer confidence in the UK fell for the first time in three months in February, according to a long-running survey, amid rising unemployment and strained household budgets.
The GfK consumer confidence index, which polls households on their feelings about the economy and their own personal finances, fell by 3 points to -19 in February, from -16 the previous month and the lowest level since November. Analysts had expected a reading of -15.
Illustration: GfK
Neil Bellamy, consumer insights director at GfK, said:
double quotation mark“This decline is mainly driven by weaker perceptions of personal finances — both looking back a year and ahead. Fewer people say that now is a good time to make major purchases (a measure that has dropped 4 points) and fewer consumers intend to save money (the Savings Index is down 7 points).
“Views on the broader economy remain firmly in negative territory, with consumers anticipating only limited economic growth this year. Unemployment has now reached its highest level in nearly five years, and this is increasing concerns about job security, particularly given the backdrop of weak wage growth.”
The survey, which has been running since the 1970s, was taken before official figures revealed that inflation had dropped to 3% in January, from 3.4% a month earlier, which may boost household confidence.
Elliott Jordan-Doak, a senior UK economist at Pantheon Macroeconomics, said:
double quotation mark“We think February’s drop in confidence looks more like a blip than the start of a downward trend. We think that consumers’ confidence should improve slowly over the coming year as the economic backdrop improves, though we expect some bumps along the way, particularly as the local and mayoral elections in July are likely to be a political flashpoint.”
A separate survey released by Lloyds Bank found that businesses are feeling more optimistic, with an improvement in sentiment towards the economy. Optimism in UK growth jumped by 8 points to 36% in February. Overall business confidence remained the same as January at 44% as firms’ confidence about their own trading reduced by 6 points to 53%.
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Pound calm after Green triumph in Gorton and Denton byelection
The Green party’s landmark victory in the Gorton and Denton byelection has not rocked the financial markets.
Sterling is slightly higher against the US dollar, up $0.02 at $1.3505, despite the fresh pressure on Keir Starmer after Labour came third at the polls overnight.
The pound is flat against the euro, at €1.1424, having hit its lowest level of the year earlier today.
UK government bonds are flat in early trading too.
Daniela Hathorn, senior market analyst at Capital.com, says one by-election upset alone is unlikely to trigger sustained sterling weakness unless it becomes part of a broader trend.
But the pound could weaken if there is a perception of rising political fragmentation, especially if it increases the probability of leadership uncertainty or fiscal ambiguity.
Hathorn says:
double quotation mark“The headline signals more than just a local political upset, it reinforces the narrative of fragmentation within UK politics at a time when markets are highly sensitive to policy stability. A by-election result that pushes Labour into third place, particularly behind both the Greens and Reform UK, raises questions about the party’s cohesion and broader electoral positioning.
For markets, the issue is not necessarily the immediate seat count, but what it implies about political momentum, leadership authority and future policy direction. If leadership challenges or internal divisions intensify, uncertainty around fiscal plans, regulatory reform and economic strategy could rise.
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Updated at 03.18 EST
Block shares surge as it lays off 40% of staff because of AI
Depressing market move of the day: Shares in tech company Block have surged after it announced it is cutting 40% of its staff.
Co-founder Jack Dorsey has blamed the cuts on the rise of “intelligence tools,” as he reshapes Block – the firm behind Square, Cash App and Afterpay – to capitalize on its use of artificial intelligence.
Dorsey told shareholders:
double quotation mark“The core thesis is simple. Intelligence tools have changed what it means to build and run a company.
A significantly smaller team, using the tools we’re building, can do more and do it better.”
The company is laying off more than 4,000 people, reducing the workforce to just under 6,000.
Block’s shares surged 23.52% in after hours trading…
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Robert Fishman, senior analyst at Moffett Nathanson, says a combined Paramount/Warner Bros could be a ‘serious industry player’, if management stump up the necessary funds.
Fishman says:
double quotation mark“Altogether, while the war for Warner Bros. Discovery ended sooner than expected, this result confirms our ongoing view that WBD was a necessity for PSKY while Netflix was being opportunistic.
It signals that Netflix believes in its internal growth story enough to maintain M&A discipline. We also believe the future Paramount Skydance Warner Bros. Discovery — they’ll need a better name — could finally transform two subscale media companies into a more serious industry player, provided management has the financial flexibility to execute on its vision.”
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California Attorney General: Paramount/Warner Bros is not a done deal
Analysts suspect that regulators, such as California Attorney General Rob Bonta, could attempt to challenge Paramount’s takeover of Warner Bros Discovery.
Bonta, a Democrat, said late on Thursday that his office would take a ‘vigorous’ approach to the deal.
In a statement issued Thursday evening, Bonta said:
double quotation mark“Paramount/Warner Bros is not a done deal. These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”
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Introduction: Netflix shares jump after walking away from Warner Bros Discovery deal
Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.
Every good drama needs a few twists and turns. And the race for ownership of Warner Bros Discovery has certainly delivered.
Overnight, Netflix has walked way from the deal, declining to match a new, improved takeover offer from its rival, Paramount Skydance.
Netflix’s hopes were blown away by Paramount lifting its offer for the whole of Warner Bros to $31 per share, beating Netflix’s bid of $27.75 per share for Warner Bros’ streaming and studio assets.
Backing out of the bout, Netflix said:
double quotation mark“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.”
Netflix’s shares have surged by 8.5% in after hours trading, suggesting relief that the streaming company has not risked overpaying for Warner Bros.
Netflix’s shares had fallen by almost a third over the last six months.
This clears way for Paramount to win WBD’s assets, including Warner Bros, the studio behind franchises including Harry Potter, Superman and Batman, as well as HBO, home to shows including Game of Thrones, The White Lotus and Succession.
It would also give Paramount, owned by Larry Ellison (a friend of Donald Trump) ownership of CNN – he already controls rival news network CBS.
Any deal still need to win regulatory approval, though, so this may not be the final act in the Warner Bros Discovery story…..
The agenda
7am GMT: Sweden’s GDP report for Q4 2025
10.30am GMT: India’s GDP report
1pm GMT: Bank of England chief economist Huw Pill: Panellist at Elgin Advisory and Society for Professional Economists ‘UK & US economics’ webinar
1.30pm GMT: Canada’s GDP report for Q4 2025
1.30pm GMT: US producer prices inflation report for January
Share
Updated at 02.21 EST
