Netflix has sweetened its $82.7bn offer for the studios and streaming businesses of Warner Bros Discovery (WBD) by making it an all-cash deal, streamlining its potential completion in the face of a hostile bid from Paramount Skydance.
The streaming company had originally secured the unanimous backing of the WBD board last month with a cash-and-shares proposal that valued the business at $27.75 a share. The two companies said the switch to an all-cash offer at the same valuation simplifies the transaction structure and provides greater certainty of value for WBD stockholders.
Netflix said the offer would enable WBD investors to vote on the proposed deal as soon as April. Ted Sarandos, Netflix's co-chief executive, said the revised agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty. The WBD board continues to support and unanimously recommend the transaction.
When the deal goes through, investors in WBD will also receive shares in its global networks operation, including CNN, the Cartoon Network and the Discovery Channel, which is being spun off as a separate company. During an earnings call, Sarandos said Netflix had begun the regulatory process and believed it would secure government approval.
Paramount is continuing to pursue its own $108.4bn cash takeover of the whole of WBD, which it has taken hostile to try to get investors to accept and override the board's agreement with Netflix. Last week, Paramount said it planned to nominate directors to WBD's board to vote against the approval of the Netflix deal, and filed a lawsuit seeking disclosure of financial information related to the agreement. On Thursday, a judge at a Delaware court rejected Paramount's lawsuit.
Under the Netflix deal, the streaming company is poised to take control of WBD's prize assets such as Warner Bros, the studio behind franchises including Harry Potter, Superman and Batman, as well as HBO. WBD's board has twice told shareholders to reject the hostile takeover bid, calling it the largest leveraged buyout in history.
