Netflix and Warner Bros. say this will provide the greatest value to shareholders, consumers, and the entertainment industry.
Streaming titan Netflix has adjusted its offer for Warner Bros. Discovery, according to a Jan. 20 Securities and Exchange Commission filing.
Netflix stated that it will now pay all cash for Warner Bros. and HBO, rather than a mix of cash and stock, citing its strong cash flow.
The company is offering $27.75 per Warner Bros. share for the entertainment empire’s film studio and streaming assets. CNN and other channels owned by Warner Bros. Discovery will transition to a separate entity called Discovery Global.
A Netflix–Warner Bros. merger would “deliver the best outcome” for investors, consumers, and the entertainment industry, according to Ted Sarandos, co-CEO of Netflix.
“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,” Sarandos said in a statement.
“The acquisition will also significantly expand U.S. production capacity and investment in original programming, driving job creation and long-term industry growth.”
David Zaslav, president and CEO of Warner Bros. Discovery, suggested that the amended offer brings the two companies closer to inking an agreement.
“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,” Zaslav said in a statement.
Keeping Paramount at Bay
The move could potentially fend off Paramount Skydance’s repeated hostile takeover bid.
Since early December, Paramount has made several attempts to acquire Warner Bros. with an all-cash offer of $108.4 billion, higher than Netflix’s initial proposal of $72 billion—$23.25 in cash and $4.50 in Netflix stock for each outstanding share.
The Warner Bros. board of directors has instead urged stockholders to rebuff the proposal, saying that the Netflix deal is superior since it is less leveraged and far more likely to be approved by regulators.
Warner Bros. stated in its filing that Netflix maintains an investment‑grade credit rating, while Paramount’s debt is classified as junk by the S&P 500 and may face additional financial and regulatory strain.
By Andrew Moran
