Netflix has revised its acquisition proposal for Warner Bros. Discovery (WBD), offering an all-cash payment for WBD shares, shifting from its previous cash-and-stock agreement with WBD’s board. The offer maintains the last agreed price of $27.75 per share for WBD’s movie studio and streaming assets and values the company at $82.7 billion.
The updated proposal simplifies the deal structure, provides greater certainty of value, and speeds up the timeline for a shareholder vote, the companies said in a Tuesday statement. Netflix said it would finance the deal using cash, debt, and committed financing.
The revised offer follows increased efforts by Paramount Skydance, a rival suitor, to secure WBD shareholders with an all-cash, $30-per-share offer for the entire company. Paramount’s offer includes a $40 billion guarantee from Oracle co-founder Larry Ellison.
Paramount last week filed a lawsuit against WBD for additional information regarding Netflix’s offer and announced its intention to nominate new members to Warner Bros.’ board after WBD rejected its bids. A court rejected Paramount’s motion to expedite the lawsuit.
Netflix had consistently adhered to its original cash-and-share offer, with the full backing of WBD’s board, which has rejected Paramount’s offers. WBD has stated that a sale to Netflix represents a better deal due to Netflix’s capital availability. WBD also said Paramount’s deal poses materially more risk, as it would encumber the combined entity with $87 billion in debt.
Warner Bros. has also questioned Paramount’s operational viability post-acquisition, arguing that incurring such debt would further worsen Paramount’s current junk credit rating and exacerbate its negative free cash flow.
