Netflix updates its Warner Bros. acquisition proposal to an all-cash deal.
Netflix has revamped its acquisition proposal for Warner Bros. Discovery, shifting to an all-cash offer instead of the previous $82.7 billion cash and stock arrangement. This move aims to accelerate the sale of WBD’s studios and streaming operations, especially in light of rival bidder Paramount’s attempts to sway shareholders with its own $108 billion all-cash bid.
“The WBD Board remains fully supportive and unanimously endorses our transaction, confident it will yield the best results for stockholders, consumers, creators, and the wider entertainment sector,” stated Ted Sarandos, co-CEO of Netflix. “Our updated all-cash agreement will facilitate a quicker timeline for a stockholder vote and offer more financial certainty at $27.75 per share in cash, along with the value from the planned separation of Discovery Global.”
The revised deal will be funded through a mix of available cash, credit, and other financing options, receiving unanimous approval from both Netflix’s and WBD’s boards. However, the overall acquisition is still pending regulatory and WBD shareholder approvals.
Initially, under the terms announced on December 5th, WBD shareholders were to receive $23.25 in cash and $4.50 in Netflix stock, with stipulations if Netflix’s share price dipped below $97.91. By December 8th, Netflix shares fell below that mark, coinciding with Paramount’s launch of a self-proclaimed “superior” all-cash hostile takeover bid, arguing that the Netflix agreement left WBD shareholders dependent on “a complex and volatile mix of equity and cash.”
Reports of the changes emerged on January 13th, with sources indicating ongoing discussions about the revisions. WBD has already turned down Paramount’s takeover attempts and is currently facing a lawsuit from the company led by David Ellison, demanding more transparency regarding the Netflix merger. By transitioning to an all-cash deal, Netflix aims to streamline the acquisition process and mitigate any further challenges from competitors or regulatory hurdles it must navigate to complete the merger.
