Netflix has changed the terms of its deal with Warner Bros. Discovery to offer shareholders a cash buyout instead of a combination of cash and stock, a move that should simplify the deal structure and bring it to a vote more quickly as rival Paramount Skydance raises the stakes.
Netflix has changed the terms of its deal with Warner Bros. Discovery to offer shareholders a cash buyout instead of a combination of cash and stock, a move that should simplify the deal structure and bring it to a vote more quickly as rival Paramount Skydance raises the stakes.
According to TechCrunch, Netflix is moving to a fully cash-based payment for Warner Bros. Discovery (WBD), revising the previous «cash + stock» scheme that the companies had already agreed to at the WBD board level. At the same time, the price of the key WBD assets (the film studio and streaming business) remains unchanged: $27.75 per share, and the entire structure values WBD at $82.7 billion.
The companies explain that the «all-cash» offer makes the offer clearer to investors, provides more certainty about the value and shortens the path to a shareholder vote. Netflix plans to finance the deal with a combination of equity, debt and already secured financing.
The restructuring comes amid pressure from Paramount, which is pushing an all-cash bid of $30 per share for all of Warner Bros. Discovery. The report also says that Paramount has backed the offer with a $40 billion guarantee from Oracle co-founder Larry Ellison and is also suing to get more details about Netflix’s offer. WBD’s board, on the other hand, continues to support Netflix and has previously called the Paramount scenario riskier due to the combined company’s potential debt load (WBD’s public arguments included an estimate of $87 billion in debt) and the buyer’s financial condition.
Warner Bros. Discovery has been restructuring its media business in recent years amid the decline of cable television and competition from streaming services. Against this backdrop, the company has explored options for selling assets, and the rivalry between bidders has turned into a competition over terms and guarantees for shareholders.
Previously, dev.ua wrote about how Netflix agreed to acquire Warner Bros Discovery. This historic merger will unite the world leader in streaming and one of Hollywood’s oldest studios.
