Netflix has revised its takeover proposal for Warner Bros Discovery, switching to an all-cash offer valued at $82.7 billion for the studio and streaming businesses, a move aimed at shutting down rival interest from Paramount.
The revised bid, which retains the original headline valuation, has received unanimous backing from Warner Bros’ board, according to a regulatory filing released on Tuesday. Under the new terms, Netflix will pay Warner Bros shareholders $27.75 per share in cash for its film and television studios, vast content library and HBO Max streaming service, replacing the earlier mix of cash and stock.
Warner Bros Acquisition Race
Both Netflix and Paramount have been vying for Warner Bros, attracted by its globally recognised studios, extensive intellectual property portfolio and major franchises including Game of Thrones, Harry Potter and DC Comics characters such as Batman and Superman.
The move comes after Warner Bros rejected a David Ellison-led Paramount bid, despite Paramount revising its terms and launching an aggressive public campaign to persuade shareholders that its offer was superior.
Under the previous structure, Netflix offered Warner Bros shareholders $23.25 in cash and $4.50 in Netflix stock.
“The merger consideration is a fixed cash amount to be paid by an investment-grade company, providing Warner Bros stockholders with certainty of value and immediate liquidity upon closing,” Warner Bros said in the filing.
The board also disclosed valuation details for Discovery Global, a planned spin-off that will house Warner Bros’ cable television assets, including CNN, TNT Sports and the Discovery+ streaming service. Warner Bros has consistently argued that the Netflix deal is superior to Paramount Skydance’s $30-per-share cash bid because shareholders would retain an equity stake in the separately listed Discovery Global entity.
Advisers to Warner Bros used three valuation methodologies for Discovery Global, estimating a low-end value of $1.33 per share when applying a single enterprise value across the business. The upper end of the range was $6.86 per share, assuming the spinoff becomes involved in a future transaction.
Warner Bros reiterated its reasons for rejecting Paramount’s $30-per-share all-cash offer, citing concerns over valuation and what it described as “numerous risks, costs and uncertainties” associated with the proposal.
