Netflix has walked away from its planned takeover of Warner Bros Discovery, declining to raise its offer for the media conglomerate’s storied Hollywood studios and streaming business after it determined a sweetened rival offer from Paramount Skydance to be “superior”.

In a statement on Thursday evening, Netflix co-chief executives Ted Sarandos and Greg Peters said that “at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive”.

In its revised offer, Paramount offered $31 per share for the company, up from $30, a $7bn regulatory termination fee if the merger is not improved, and a “ticking fee” amounting to about $650m in cash each quarter beginning after September.

Netflix was given four business days to beat Paramount’s revised offer – but quickly decided against doing so.

“We believe we would have been strong stewards of Warner Bros’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the US,” Sarandos and Peters said in their statement.

“But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

David Zaslav, the president and chief executive, of Warner Bros Discovery, released a statement Thursday evening calling Netflix “a great company” and praising its leadership.

“We wish them well in the future,” he said.

Netflix’s unwillingness to revise its offer $82.7bn offer for the studio and streaming assets of WBD means that the Ellison family are now expected to acquire the entirety of the company, including the cable news network CNN.

“Once our board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders,” Zaslav said. “We are excited about the potential of a combined Paramount Skydance and Warner Bros Discovery and can’t wait to get started working together telling the stories that move the world.”

David Ellison, the chief executive of Paramount, had released a statement earlier on Thursday saying the company was “pleased WBD’s board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing”.

WBD had announced a 20 March special meeting for shareholders to vote on the Netflix merger.

Netflix’s announcement that it is backing away from the deal comes after Sarandos held meetings in Washington with Trump administration officials.

Netflix’s merger with WBD was expected to receive close regulatory scrutiny, including a thorough review by the Department of Justice to determine if it poses a threat to competition in the entertainment industry.

In their statement, Sarandos and Peters thanked WBD “for running a fair and rigorous process”.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” the executives said. “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.”

Sarandos and Peters said: “We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.”

Officials in the White House have long preferred the bid from Paramount, considering that the Ellison family has a friendly relationship with the president.

WBD shareholders will still have to approve Paramount’s merger with the company, though as the only remaining bidder that might only be a formality.