Netflix is preparing an all-cash offer for Warner Bros. Discovery’s studios and streaming businesses, a source familiar with the matter told Reuters on Jan. 13, 2024. The move aims to accelerate a sale expected to take months amid political opposition and competition from rival bidder Paramount.
Bloomberg News reported the development earlier that day. Netflix declined to comment, and Warner Bros. Discovery did not immediately respond to Reuters’ request for comment.
Netflix shares rose 1.02% on Tuesday, while Warner Bros. Discovery shares climbed 1.62%. Paramount shares remained flat.
Netflix’s original $82.7 billion proposal combined cash and stock for Warner Bros. Discovery’s film and streaming assets. Paramount offered $108.4 billion in cash for the entire company, including its cable-TV business.
Warner Bros. Discovery has favored Netflix’s deal over Paramount’s amended bid. The company’s board argued that Paramount’s offer relies on significant debt financing, increasing the risk of closing and rendering it “inadequate.”
Paramount and Netflix are competing in a bidding war for Warner Bros. Discovery, its film and television studios, and its content library. Key franchises include “Harry Potter,” “Game of Thrones,” “Friends,” and the DC Comics universe, along with classic films such as “Casablanca” and “Citizen Kane.”
Lawmakers have raised concerns that further media consolidation could increase prices and limit consumer choice.
On Monday, Paramount sued Warner Bros. Discovery over its agreement with Netflix and announced plans to nominate directors to the board. Paramount claims its all-cash bid of $30 per share for the whole company surpasses Netflix’s prior cash-and-stock offer of $27.75 per share for the studios and streaming assets. It also argues the bid would clear regulatory hurdles more easily.
Netflix agreed to a $5.8 billion termination fee if it fails to secure regulatory approval. Warner Bros. Discovery would owe Netflix a $2.8 billion termination fee if it abandons the agreement.
