Netflix is reportedly sweetening the pot for Warner Bros Discovery shareholders by switching its $83 billion acquisition proposal to an all-cash offer. The strategic change is designed to win over investors and speed up the transfer of WBD’s lucrative studio and streaming divisions. This comes as a defensive measure against a lingering, higher-value hostile bid from Paramount Skydance.
The original agreement, struck in early December, promised shareholders $23.25 per share through a combination of cash, Netflix stock, and ownership in a spinoff company containing assets like CNN and the Discovery Channel. The new all-cash structure simplifies the payout, offering immediate value and removing the uncertainty of future stock performance or the viability of the spun-off cable networks.
Looming in the background is a $108.4 billion counter-offer from Paramount, heavily backed by tech billionaire Larry Ellison. WBD’s board has steadfastly advised shareholders to reject this approach, criticizing the debt leverage required to fund it. Paramount has responded aggressively, planning to shake up the WBD board with new directors who would oppose the Netflix merger.
The merger would see Netflix absorb some of the most valuable intellectual property in Hollywood, including the entire HBO library and DC Comics film universe. This prospect has triggered a wave of criticism from industry insiders and politicians who fear a monopoly. They argue that combining Netflix’s subscriber base with Warner’s content engine would skew the market unfairly.
Despite the political noise, the financial incentives are driving the narrative. WBD shares jumped 1.6% upon news of the cash offer, signaling shareholder approval. As Netflix tries to close the door on Paramount, the focus remains on whether cash in hand is enough to seal the deal quickly.