Netflix Revises Warner Bros. Bid to All-Cash Offer

Netflix has revised its proposed acquisition of Warner Bros. Discovery (WBD), shifting to an all-cash offer in a move aimed at strengthening its position amid an escalating takeover battle.

Netflix and WBD revealed the revised deal on Tuesday morning. The updated terms call for an all-cash payment of $27.75 per share for WBD’s studio and streaming assets, replacing the earlier structure that included $23.25 in cash and $4.50 in Netflix stock. Under Netflix’s offer, WBD’s studio and streaming businesses are valued at an enterprise value of $82.7 billion and an equity value of $72 billion.

“Today’s revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world and with it even more people enjoying the entertainment they love to watch the most,” said David Zaslav, President and CEO of Warner Bros. Discovery. “By coming together with Netflix, we will combine the stories Warner Bros. has told that have captured the world’s attention for more than a century and ensure audiences continue to enjoy them for generations to come.”

The shift comes as the companies move to defend against a hostile takeover bid from Paramount Skydance, which is seeking to acquire all of WBD, including its cable networks. Paramount has criticized the Netflix transaction in the past, arguing that its own all-cash proposal is more attractive. Paramount’s offer values WBD at $30 per share, implying an enterprise value of $108.4 billion and an equity value of $77.9 billion.

Netflix said Tuesday that the transaction will be financed “through a combination of cash on hand, available credit facilities and committed financing.” In a press release, the companies said the revised structure “simplifies the transaction structure, provides greater certainty of value for WBD stockholders, and accelerates the path to a WBD stockholder vote.”

Netflix’s revised bid follows a further escalation in the takeover fight by Paramount last week. Paramount filed a lawsuit seeking to force WBD to disclose financial details related to its deal with Netflix, though the court rejected the company’s request to fast-track the case. Paramount also announced plans to initiate a proxy fight, saying the company would nominate its own slate of directors to replace the WBD board.

WBD has repeatedly rebuffed Paramount’s advances, describing the proposal as a “leveraged” buyout that could result in total post-acquisition debt of approximately $87 billion. Instead, WBD has thrown its support behind Netflix’s proposal and continues to urge shareholders to approve it, arguing that the deal, together with the planned separation of its cable networks into Discovery Global, offers a stronger long-term path for shareholders.

Samuel A. Di Piazza, Jr., chair of the WBD board, said Tuesday, “By transitioning to all-cash consideration, we can now deliver the incredible value of our combination with Netflix at even greater levels of certainty, while providing our stockholders the opportunity to participate in management’s strategic plans to realize the value of Discovery Global’s iconic brands and global reach.”

Paramount has countered that WBD’s linear television channels have little to no equity value.

Netflix co-CEO Ted Sarandos said the revised deal would benefit audiences and the industry at large. “Together, Netflix and Warner Bros. will deliver broader choice and greater value to audiences worldwide, enhancing access to world-class television and film both at home and in theaters,” Sarandos said in a statement. “The acquisition will also significantly expand U.S. production capacity and investment in original programming, driving job creation and long-term industry growth.”

Both companies’ boards have approved the amended all-cash transaction.

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