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Netflix Sweetens the Pot in Bid for Warner Bros. Discovery, Accelerating Shareholder Vote
Los Angeles, CA – The battle for Warner Bros. Discovery (WBD) is heating up, with streaming giant Netflix announcing on Tuesday an amended, all-cash offer designed to make its acquisition bid even more appealing to investors. This move intensifies the ongoing competition with Paramount for control of the media conglomerate.
The revised offer, valued at $27.75 per WBD share, translates to an equity value of $72 billion and a total enterprise value of approximately $82.7 billion. A significant advantage of this all-cash proposal is the acceleration of the shareholder vote.
Stock-based deals typically require more extensive disclosures and documentation, pushing back the voting timeline. With the new cash offer, WBD investors no longer need to consider the volatility of Netflix’s stock price, and a vote could now take place as early as late February, rather than the original spring or summer projection.
WBD’s board has unanimously endorsed Netflix’s enhanced offer.
David Zaslav, President and CEO of Warner Bros. Discovery, expressed optimism about the merger: “Today’s revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world and with it even more people enjoying the entertainment they love to watch the most. By coming together with Netflix, we will combine the stories Warner Bros. has told that have captured the world’s attention for more than a century and ensure audiences continue to enjoy them for generations to come.”
Ted Sarandos, co-CEO of Netflix, echoed this sentiment, stating, “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. The acquisition will also significantly expand U.S. production capacity and investment in original programming, driving job creation and long-term industry growth.”
The acquisition saga began in October when Warner Bros. indicated its openness to offers after receiving multiple unsolicited bids. By December 5, following an initial bidding war between Netflix and Paramount Skydance, WBD had initially agreed to Netflix’s original proposal.
However, a week later, Paramount launched a hostile takeover bid. The WBD board initially advised shareholders against Paramount’s offer, citing a lack of backing from Oracle creator Larry Ellison, father of Paramount CEO David Ellison.
That changed on December 22, when Paramount announced it had secured Larry Ellison’s support, amounting to $40 billion in equity. Netflix’s latest amendment is a direct response to this competitive pressure, aiming to solidify its position.
In a related development, WBD is also adjusting its plans for spinning off a segment of its business. The company intends to separate its cable operations, which include prominent channels like CNN and TNT, into an independent, publicly traded entity. While Paramount’s offer had included this segment, Warner Bros. has now announced a reduction of $260 million in the debt associated with this business, according to The New York Times.