Netflix is now offering to buy Warner Bros. Discovery’s studio and streaming business in all cash — in an effort to win over the Hollywood giant’s shareholders for its $72 billion merger and potentially thwart a hostile bid from Skydance-owned Paramount.
Back in December, Netflix struck a cash and stock deal with Warner valued at $27.75 per share, giving it a total enterprise value of $82.7 billion, including debt. But on Tuesday, the companies announced that they would be revising the transaction to simplify its structure, provide more certainty of value for Warner stockholders and speed up the path to a shareholder vote - which they said could arrive by April.
The all-cash transaction is still valued at $27.75 per Warner share. Warner stockholders will also receive the additional value of shares of Discovery Global, which would become a separate public company following a previously announced separation from Warner Bros.
Warner leadership has repeatedly backed a merger with Netflix — and the boards of both companies approved the all-cash deal announced Tuesday. In a statement, Warner CEO David Zaslav said the revised agreement “brings us even closer to combining two of the greatest storytelling companies in the world.”
A spokesperson for Paramount declined to comment when reached by The Associated Press on Tuesday. Unlike Netflix, Paramount wants to acquire Warner’s entire company — including networks like CNN and Discovery — and went straight to shareholders with an all-cash, $77.9 billion offer last month.
Warner stockholders have until 5 p.m. ET Wednesday to tender their shares in support of Paramount’s bid, which has an enterprise value of $108 billion including debt. But that deadline could be pushed back further. While Paramount declined to share further details on Tuesday, the Wall Street Journal reported last week that the company was planning on another extension.
Beyond its tender offer, Paramount has promised a proxy fight. Last week, the company said it would nominate its own slate of directors before Warner’s next shareholder meeting, the date of which has still not been set.
Paramount also filed a suit in Delaware Chancery Court seeking to compel Warner Bros. to disclose to shareholders how it values its bid and the competing offer from Netflix. But a judge on Thursday denied Paramount’s request to expedite that proceeding.
In a statement at the time, Warner applauded the court’s decision and called Paramount’s lawsuit “yet another unserious attempt to distract.” Paramount, meanwhile, maintained that the ruling wasn’t about the merits of its allegations and said Warner shareholders “should ask why their Board is working so hard to hide this information.”
Regardless of who eventually wins the upper hand, a Warner Bros. Discovery sale could be a long, drawn-out process that is almost certain to attract tremendous antitrust scrutiny. On Tuesday, Netflix and Warner maintained that they expect to close on a merger 12 to 18 months from December’s agreement.
Still, Paramount’s hostile bid could complicate that timeline. Politics are also expected to come into play under President Donald Trump, who has made unprecedented suggestions about his personal involvement on whether a deal will go through.
Trade groups across the media and entertainment industry have sounded the alarm over both bids, warning that further consolidation in the industry could result in job losses and less diversity in content — with particularly negative consequences for filmmaking.
The companies have spoken on those concerns. On Tuesday, Netflix co-CEO Ted Sarandos said combining with Warner “will deliver broader choice and greater value to audiences worldwide” both at home and in theaters — while “driving job creation and long-term industry growth.”
Netflix’s stock inched up just under 1% Tuesday morning, while shares of Warner Bros. Discovery and Paramount-Skydance fell slightly.
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