With Paramount still in hostile pursuit of Warner Bros Discovery, the media company and Netflix on Tuesday jointly announced an amended deal that updates the SVOD giant’s proposed transaction for WBD’s studio and streaming businesses to all-cash.
Netflix’s all-cash offer for WBD is unchanged from the amount previously agreed to by WBD’s board on December 5 and continues to be valued at $27.75 per WBD share.
It comes as Paramount – despite repeated rejections from WBD’s board of directors - has remained unrelenting in efforts to take over the entire WBD enterprise with its own $30 per share all-cash hostile bid.
Against that backdrop, Netflix and WBD on Tuesday said the all-cash revision simplifies the duo’s deal, gives WBD stockholders greater certainty of the value and speeds up the path to a WBD shareholder vote on the Netflix agreement.
WBD’s board has unanimously approved the amended transaction with Netflix.
Coinciding with the all-cash update, WBD wants to speed up the timeline and enable stockholders to vote on the proposed Netflix deal by April 2026 and filed a preliminary proxy statement with the SEC today.
Netflix plans to finance the WBD all-cash deal through a combination of cash on hand, available credit facilities and committed financing. WBD stockholders will also receive the additional value of shares of WBD’s global linear networks business, Discovery Global. WBD's global linear networks business, which includes the likes of TNT and CNN, would continue a planned separation from WBD prior to the close Netflix’s acquisition of the WBD studio and streaming assets that include HBO and HBO Max, among others.
Paramount last month revised its hostile offer with a personal guarantee by Oracle founder and Paramount CEO David Ellison’s father Larry Ellison for part of the bid’s financing, but WBD’s board of directors continued to support a deal with Netflix and recommend shareholders reject Paramount’s offer.
Looking to appeal to WBD shareholders that will vote on the transaction, previously Paramount claimed that its all-cash offer for all of WBD was superior and provided more certainty to WBD stockholders than Netflix’s prior bid that offered a mix of cash and stock.
Paramount has also raised questions about Netflix’s ability to close and sought details about the earlier agreement, including around the valuation of WBD’s global linear networks - although a judge last week denied the suitor’s request to expedite a lawsuit seeking to direct WBD’s board to provide WBD shareholders more information about the Netflix transaction.
Still, with a shareholder vote at stake, Netflix on Tuesday looked to remove potential murkiness around the value of its proposed deal.
Netflix and WBD’s joint announcement said that the streaming giant’s strong cash flow allows for the all-cash deal and eliminates market-based variability associated with the earlier stock-and-cash deal.
“Our amended agreement with Netflix is a testament to the Board's unrelenting focus on representing and advancing our stockholders' interests," said Samuel Di Piazza, Jr., Chair of WBD’s Board of Directors, in a statement. "By transitioning to all-cash consideration, we can now deliver the incredible value of our combination with Netflix at even greater levels of certainty, while providing our stockholders the opportunity to participate in management's strategic plans to realize the value of Discovery Global's iconic brands and global reach.”
Netflix co-CEO Ted Sarandos, meanwhile, noted that the WBD continues to support and unanimously recommend its acquisition.
“Our revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty at $27.75 per share in cash, plus the value from the planned separation of Discovery Global. Together, Netflix and Warner Bros. will deliver broader choice and greater value to audiences worldwide, enhancing access to world-class television and film both at home and in theaters,” stated Sarandos. “The acquisition will also significantly expand U.S. production capacity and investment in original programming, driving job creation and long-term industry growth."
And in the announcement, Netflix co-CEO Greg Peters reiterated a commitment to investment in the film and TV businesses.
“Over the last decade, when much of the entertainment industry has contracted, Netflix has grown and invested tremendously in the business of film and television in the U.S. and abroad. This transaction will further fuel that growth and investment," stated Peters. "By amending our agreement today, we are underscoring what we have believed all along: not only does our transaction provide superior stockholder value, it is also fundamentally pro-consumer, pro-innovation, pro-creator and pro-growth.”
The companies continue to expect the transaction to close 12-18 months from the original December 5 merger agreement.