Netflix is preparing an all-cash offer for Warner Bros Discovery’s studios and streaming businesses to expedite a sale process that could take months amid political opposition and competition from rival bidder Paramount Skydance, a source familiar with the matter told Reuters on January 13.
Bloomberg News reported the development earlier that day. Netflix shares rose 1.02 percent on Tuesday, while Warner Bros Discovery shares closed 1.62 percent higher. Paramount shares remained flat.
Netflix’s original proposal valued Warner Bros Discovery’s film and streaming assets at $82.7 billion, combining cash and stock. Paramount offered $108.4 billion in cash for the entire company, including its cable-TV business.
Warner Bros Discovery has favored Netflix’s deal over Paramount’s bid, even after amendments to the latter. The Warner Bros Discovery board argued that Paramount’s offer relies on a significant amount of debt financing, which heightens the risk of closing the transaction. The board stated the offer “remains inadequate.”
Paramount and Netflix are competing in a bidding war for Warner Bros Discovery, its prized film and television studios, and its extensive content library. The library includes lucrative entertainment franchises such as the “Harry Potter” series, “Game of Thrones,” “Friends,” and the DC Comics universe. It also features coveted classic films like “Casablanca” and “Citizen Kane.”
This contest has emerged as Hollywood’s most closely watched takeover battle. Studios face a landscape increasingly dominated by streaming platforms alongside volatile theatrical revenues.
Lawmakers across the political spectrum have voiced concerns that further media consolidation could drive up prices for consumers and reduce choice in the market. On Monday, Paramount sued Warner Bros Discovery over its agreement with Netflix. Paramount also announced plans to nominate directors to Warner Bros Discovery’s board.
Paramount contends that its all-cash bid of $30 per share for the entirety of Warner Bros Discovery surpasses Netflix’s prior cash-and-stock offer of $27.75 per share, which targeted only the studios and streaming assets. Paramount asserts its proposal will clear regulatory hurdles more readily.
The agreement between Netflix and Warner Bros Discovery includes specific termination fees. Netflix has committed to a $5.8 billion payment if it fails to secure regulatory approval. Warner Bros Discovery would owe Netflix a $2.8 billion termination fee if it abandons the deal with the streaming service.
