In an effort to sweeten the pot for Warner Bros. Discovery shareholders, Netflix has revised its acquisition offer. The streaming giant is now proposing an all-cash deal for shares, moving away from the original cash-and-stock agreement struck with the WBD board. However, the fundamental price remains unchanged at $27.75 per share for WBD’s movie studio and streaming assets, keeping the total valuation of the deal at $82.7 billion.
According to a joint statement, this new all-cash structure simplifies the transaction. It provides greater certainty of value for shareholders and is expected to accelerate the timeline for a shareholder vote. Netflix stated it will finance the acquisition using a combination of its available cash, debt, and committed financing.
This revision comes as rival bidder Paramount Skydance intensifies its efforts to win over WBD shareholders with a competing all-cash offer. Paramount is bidding $30 per share for the entire company and has secured a substantial $40 billion financial guarantee from Larry Ellison, the billionaire co-founder of Oracle and father of Paramount Skydance CEO David Ellison.
Paramount, which has pursued Warner Bros. Discovery for months, recently sued the company. The lawsuit seeks more detailed information about 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 bids, which the board has described as illusory and risky. A court subsequently rejected Paramount’s attempt to expedite its lawsuit.
Netflix had previously maintained its original cash-and-share proposal, enjoying the full support of the WBD board. The board has consistently favored Netflix, arguing that a deal with the streaming giant is superior because Netflix possesses the capital to pay. WBD has expressed that Paramount’s proposal carries materially more risk, suggesting it would saddle a combined company with approximately $87 billion in debt.
Warner Bros. Discovery has also publicly questioned Paramount’s operational stability following a potential deal. The company argues that taking on such significant debt would further downgrade Paramount’s already sub-investment-grade credit rating. WBD has raised additional concerns about Paramount’s negative free cash flow, which would likely be worsened 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, struggling with declining cable viewership and fierce competition from streaming rivals like Netflix. Netflix emerged as the leading suitor after a bidding war against Paramount and Comcast.