LOS ANGELES — Netflix has revised its bid for Warner Bros. Discovery’s studio and streaming assets into an all-cash offer, keeping the price unchanged at $82.7 billion, in a move aimed at fending off rival suitor Paramount.
The new proposal values Warner Bros. at $27.75 per share and has received unanimous backing from the company’s board, according to a regulatory filing. Both Netflix and Paramount Skydance have been competing for Warner Bros. because of its film and television studios, deep content library, and major franchises including Game of Thrones, Harry Potter, and DC Comics characters.
Paramount has sought to strengthen its competing offer and mounted a public campaign to persuade shareholders, but Warner Bros. has continued to favour Netflix’s proposal and declined to comment on the latest bid.
Warner Bros. plans to hold a special shareholder meeting to vote on the deal, expected by April. Netflix co-CEO Ted Sarandos said the shift to an all-cash structure would speed up the voting process and provide greater certainty for shareholders.
In early trading, Netflix shares rose 0.9%, while Paramount and Warner Bros. shares fell 1.9% and 0.5%, respectively. Some investors said the bidding contest may not yet be over, noting that the revised offer increases pressure on Paramount to improve its proposal.
The all-cash bid replaces Netflix’s earlier cash-and-stock offer. Netflix said the fixed cash consideration reduces valuation risk and ensures immediate liquidity for Warner Bros. shareholders.
Warner Bros. also disclosed valuation estimates for Discovery Global, a planned spin-off that will house cable and television assets such as CNN, TNT Sports and Discovery+. The board reiterated that the Netflix deal remains superior to Paramount’s $30-per-share cash bid because shareholders would retain exposure to the spun-off business.
Paramount has argued that the cable spin-off holds little value and sought to force faster disclosure through the courts, but a Delaware judge rejected its request. Paramount’s tender offer is set to expire on January 21.
Analysts said Paramount may still appeal to shareholders, but without a higher bid its efforts may have limited impact. The final decision is expected to hinge on how investors assess the long-term value of Warner Bros.’ cable assets.
While an agreement with Netflix would result in a combined group carrying about $85 billion in debt, Netflix’s much larger market value and investment-grade credit profile make the deal less leveraged than a tie-up with Paramount. Netflix has also agreed to reduce the amount of debt allocated to Discovery Global.
Regulatory scrutiny remains a key hurdle, as policymakers have raised concerns about further consolidation in the media industry potentially reducing competition and consumer choice.
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