Netflix has converted its $82.7 billion offer for Warner Bros. Discovery’s movie studio and streaming assets into an all-cash deal, aiming to lock down shareholder support before a looming vote.
At a Glance
- Netflix will now pay $27.75 per share in cash instead of a cash-and-stock mix
- The headline valuation stays at $82.7 billion, unchanged from the earlier agreement
- Rival bidder Paramount Skydance is pushing an all-cash $30-per-share bid for the entire company
- Why it matters: WBD shareholders must now weigh a lower but fully financed Netflix offer against a richer Paramount deal the WBD board calls too risky
The revised structure, announced Tuesday, removes stock-market volatility from the payout and “provides greater certainty of value,” the companies said in a joint statement. Netflix says it will fund the purchase with cash on hand, new debt, and “committed financing,” though it did not disclose the exact mix or identify the lenders.
Paramount Escalates the Battle
Paramount Skydance has refused to back down. The media conglomerate last week secured a $40 billion guarantee from Oracle co-founder Larry Ellison, father of Paramount Skydance CEO David Ellison, to underpin its $30-per-share all-cash bid for the whole of Warner Bros. Discovery.
Paramount has also taken legal action, suing WBD for additional details on Netflix’s offer and announcing plans to nominate new directors to the WBD board after its earlier overtures were rejected. A court declined Paramount’s request to fast-track the lawsuit.
WBD Board Sticks With Netflix
Despite the higher nominal price from Paramount, Warner Bros. Discovery’s board continues to back Netflix. Directors argue that Paramount’s proposal would load the combined entity with $87 billion in fresh debt, a burden they label “materially more risk.”
WBD executives have questioned whether Paramount could operate effectively after absorbing that much leverage. They point to Paramount’s existing “junk” credit rating and negative free cash flow, warning that the acquisition would deepen both problems.
What Happens Next
- WBD shareholders will receive a new proxy statement reflecting the all-cash terms
- A vote date has not been set, but the companies say the streamlined structure speeds up the timeline
- Paramount retains the right to keep lobbying shareholders and can amend its offer until the vote is certified
- Regulatory reviews in the U.S. and several other jurisdictions remain outstanding for both bidders
The clock is ticking. With two cash offers on the table and a shareholder base weighing price against execution risk, the next move belongs to investors set to decide the future of one of Hollywood’s largest content libraries.
