In an effort to sweeten the pot for Warner Bros. Discovery shareholders, Netflix has revised its offer. The streaming giant is now proposing an all-cash deal for shares, moving away from the original cash-and-stock agreement it had struck with the WBD board. However, the fundamental price remains unchanged. Netflix is still offering $27.75 per share for WBD’s movie studio and streaming assets, which continues to value the entire company at $82.7 billion.
According to a joint statement, this new all-cash offer serves to simplify the deal structure. It provides greater certainty of value for shareholders and is intended to speed up the timeline for a shareholder vote. Netflix stated it would finance the acquisition using a combination of its existing cash, debt, and committed financing.
This strategic shift comes as a rival suitor, Paramount Skydance, intensifies its efforts to win over WBD shareholders. Paramount has made an all-cash offer of $30 per share for the entirety of Warner Bros. Discovery. To bolster its bid, Paramount has secured a substantial $40 billion guarantee from Larry Ellison, the billionaire co-founder of Oracle and father of Paramount CEO David Ellison.
Paramount, which has pursued Warner Bros. Discovery for months, recently sued the company. The lawsuit seeks more detailed information regarding the Netflix offer. Paramount also announced its intention to nominate new members to the WBD board. This follows WBD’s repeated rejection of Paramount’s offers, which the company has dismissed as illusory. Paramount sought to expedite its lawsuit, but the court rejected that request.
Netflix, until this revision, had maintained its original cash-and-share proposal. It has enjoyed the full backing of the WBD board, which has resolutely favored the Netflix deal over Paramount’s advances. Warner Bros. Discovery has argued that a sale to Netflix is superior because the streaming giant possesses the capital to pay. WBD has characterized Paramount’s proposal as posing materially more risk, stating it would saddle the combined company with approximately $87 billion in debt.
Warner Bros. Discovery has also publicly questioned Paramount’s operational stability following such a deal. The company argues that raising such a massive debt load would further worsen Paramount’s current junk credit rating. WBD has raised additional concerns about Paramount’s negative free cash flow, which would likely be exacerbated by the financial demands of the acquisition.
Warner Bros. Discovery initially announced it was exploring a sale in October after receiving unsolicited interest from multiple parties. At that time, the company was valued at over $45 billion but carried billions in debt. It has faced significant challenges due to declining cable viewership and intense competition from streaming rivals like Netflix. Netflix emerged as the leading bidder after a competitive process against Paramount and Comcast.