Netflix revises offer to pay all cash for Warner Bros to stave off Paramount

In a strategic move aimed at attracting Warner Bros. Discovery (WBD) shareholders, Netflix has shifted its proposal to an all-cash offer for the company's shares. This adjustment revises the previously agreed cash-and-stock arrangement with WBD’s board. Despite the change, Netflix maintains the purchase price of $27.75 per share, which values WBD at approximately $82.7 billion. This new cash offer is designed to simplify the deal structure, providing shareholders with more certainty regarding the value of their shares. The announcement on Tuesday emphasized that this approach also accelerates the timeline for a shareholder vote. To finance the acquisition, Netflix plans to utilize cash, debt, and committed financing sources. The revised offer comes as competition heats up from Paramount Skydance, which has proactively engaged WBD's shareholders with its own all-cash proposal of $30 per share for the entire company. Paramount's bid is further backed by a substantial $40 billion guarantee from Larry Ellison, co-founder of Oracle and father of Paramount CEO David Ellison. Last week, Paramount escalated its efforts by filing a lawsuit against WBD, seeking more details about Netflix’s proposal while also nominating new board members at Warner Bros. after its previous offers were rejected. Attempting to fast-track the lawsuit, Paramount's request was denied by the court. Netflix, until this point, had remained committed to its original offer, enjoying strong support from WBD's board, which has consistently dismissed Paramount's overtures. WBD argues that a deal with Netflix is more advantageous due to the streaming giant's financial capacity, while expressing concerns over the risks associated with Paramount’s proposal, which would lead to a staggering $87 billion in debt. Furthermore, Warner Bros. has criticized Paramount's financial stability, pointing to its already poor credit rating and negative cash flow, which would likely be exacerbated by such an acquisition.