Netflix has revised its acquisition offer for Warner Bros. Discovery (WBD), proposing an all-cash transaction for the same $27.75 per share originally agreed upon, valuing WBD at $82.7 billion. This update simplifies the deal structure, offering greater value certainty and expediting the shareholder vote.
Netflix stated it would finance the acquisition through a combination of cash, debt, and committed financing. This revised offer follows intensified efforts by rival suitor Paramount Skydance, which had presented an all-cash offer of $30 per share for WBD.
Paramount Skydance’s offer included a $40 billion guarantee from Larry Ellison, Oracle co-founder and father of CEO David Ellison. Paramount previously sued WBD for details on Netflix’s initial offer and attempted to nominate new board members after WBD rejected its bids. The court declined to expedite Paramount’s lawsuit.
WBD’s board has consistently backed Netflix’s proposal, maintaining that a Netflix acquisition presents a better deal due to Netflix’s capital resources. WBD has characterized Paramount’s deal as carrying “materially more risk,” citing the potential for the combined entity to incur $87 billion in debt.
Warner Bros. has also raised concerns regarding Paramount’s operational viability post-acquisition. WBD argued that the increased debt from Paramount’s acquisition would further diminish Paramount’s “junk” credit rating and worsen its negative free cash flow.
