Netflix revises offer for Warner Bros to all-cash deal in bidding war
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The news: Warner Bros Discovery said that Netflix has amended its offer to buy Warner Bros’ studios and HBO Max streaming business to a new all-cash deal.
The companies said that they expect the new offer to enable Warner shareholders to vote on the deal by April.
The numbers: The all-cash deal of USD27.75 ($41.23) per Warner Bros share replaces the previous USD72 billion cash-and-stock deal first submitted by Netflix in early December.
The new offer reduces the amount of Warner Bros debt being placed on Discovery Global – the unit that will house cable channels CNN, TNT and Food Network – by USD260 million.
Netflix has also lined up more debt from US banks to finance its deal and now has USD42.2 billion in bridge loans in place according to a Tuesday filing.
The context: Netflix’s sweetened offer are aimed at expediting the sale process and address concerns by rival bidder Paramount Skydance that its USD30 per share cash hostile takeover bid is superior.
Paramount last week filed a lawsuit seeking information from Warner Bros on its previous agreement with Netflix and warned that it is planning to launch a proxy fight for Warner Bros Discovery board seats as it persists with its hostile pursuit of the company.
Netflix is due to release results on Wednesday morning (~8:45am AEDT) and its expected to report fourth-quarter earnings of 55 cents per share, a 28% increase from a year ago, and revenue of USD12 billion, up 17% from Q4 2024. But Bloomberg data shows analysts project a slowing of Netflix’s revenue growth in each of the next three quarters before it starts to rise again in 2027.
What they said: Netflix CEO said in a statement: “Our revised all-cash agreement demonstrates our commitment to the transaction with Warner Bros and provides WBD stockholders with an accelerated process and the financial certainty of cash consideration”
Samuel A Di Piazza, chair of the Warner Bros Discovery Board of Directors said: “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.”
The sources: Netflix Warner Bros statement, Netflix SEC filing, Bloomberg
