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 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 structure is intended to simplify the deal. It provides greater certainty of value for shareholders and is expected to speed up the timeline for a shareholder vote. Netflix stated it plans to finance the acquisition using a combination of its existing cash, debt, and committed financing.
This revision comes as a rival suitor, Paramount Skydance, intensifies its efforts to acquire Warner Bros. Discovery. Paramount has made an all-cash offer of $30 per share for the entirety of WBD. To bolster its proposal, Paramount has secured a $40 billion guarantee from Larry Ellison, the billionaire co-founder of Oracle and father of Paramount CEO David Ellison.
The competition has grown contentious. Paramount recently sued WBD to obtain more details about the Netflix offer and announced its intention to nominate new members to Warner Bros.’ board. This followed WBD’s rejection of Paramount’s bids. Paramount also sought to expedite its lawsuit, but that request was denied by the court.
Netflix, until this revision, had maintained its original cash-and-share offer. It has enjoyed the consistent backing of the WBD board, which has firmly rejected Paramount’s advances. Warner Bros. Discovery argues that a deal with Netflix is superior because the streaming giant possesses the capital to pay. In contrast, WBD has characterized Paramount’s offer as posing “materially more risk,” stating it would burden the combined company with approximately $87 billion in debt.
Warner Bros. has further questioned Paramount’s operational stability following such a deal. The company argues that raising such a significant amount of debt would worsen Paramount’s already sub-investment grade “junk” credit rating. WBD has also expressed concerns about Paramount’s negative free cash flow, a situation that would likely be exacerbated by the financial demands of the acquisition.