Netflix to pay all cash for Warner Bros. to fend off Paramount hostile takeover

In a bold move to counter Paramount's aggressive takeover bid, Netflix has opted for an all-cash acquisition of Warner Bros. Discovery, revising its previous $72 billion deal that included a mix of cash and stock. This strategic shift aims to enhance the offer for shareholders and streamline the acquisition process. The revised agreement was announced today, with Netflix confirming it will pay $27.75 per share in cash, maintaining the original price while eliminating stock components. This change simplifies the transaction structure and accelerates the timeline for a shareholder vote, which is set for April 2026. Initially, Netflix planned to acquire Warner Bros. shares with $23.25 in cash and $4.50 in Netflix stock. However, the current plan provides greater certainty for Warner Bros. stockholders by removing market fluctuations from the equation. Financing for this substantial deal will come from Netflix's available cash, credit facilities, and secured financing commitments. The acquisition, valued at $72 billion in equity and an enterprise value totaling $82.7 billion, is focused on Warner Bros.' streaming and movie studio divisions. Meanwhile, Paramount Skydance has been attempting to derail this deal with its own hostile takeover offer, proposing $108.4 billion at $30 per share, which aims to acquire the entire Warner Bros. Discovery company. The Warner Bros. board is concurrently working on a spinoff of its cable TV division, Discovery Global, a move that would be jeopardized if Paramount’s takeover were successful. This spinoff is expected to be finalized before the closing of Netflix's acquisition, positioning the company for a strong future regardless of the competitive landscape.