Netflix has switched to an all-cash offer for Warner Bros Discovery’s studio and streaming assets without increasing the $82.7bn price in a bid to shut the door on Paramount’s rival efforts to snag the Hollywood giant. The new all-cash bid, at $27.75 a share, has unanimous support from the Warner Bros board, according to a Tuesday regulatory filing. Both Netflix and Paramount Skydance covet Warner Bros for its leading film and television studios, extensive content library and major franchises such asGame of Thrones, Harry Potterand DC Comics’ superheroes Batman and Superman.
Paramount has altered its terms and engaged in an aggressive media campaign to try to convince shareholders that its bid is superior, but Warner Bros has spurned the David Ellison-led company. It declined to comment Tuesday on Netflix’s all-cash offer. Warner Bros will hold a special investor meeting to vote on the Netflix deal, with the streaming pioneer saying the meeting is expected to be held by April.
“Our revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty,” Netflix co-CEO Ted Sarandos said. Shares of Netflix were up 0.9% before the bell. Paramount shares were down 1.9%, while Warner Bros’ shares were down 0.5% in early trading.
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Netflix shares have fallen almost 15% since announcing the merger on December 5, closing at $88 per share on Friday – well below the $97.91 floor price of the original bid. That drop was part of Paramount’s argument that its bid was superior. The new $27.75-per-share offer from Netflix replaces its earlier cash-and-stock bid for $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 liquidity immediately upon closing the merger,” Warner Bros said. The company’s board also disclosed its valuation for Discovery Global, a planned spin-off that will contain television assets including CNN and TNT Sports and the Discovery+ streaming service. The board has maintained that the Netflix merger deal is superior to Paramount Skydance’s $30-per-share cash bid for the company because Warner Bros’ investors would retain a stake in the separately traded Discovery Global.
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