Netflix Revises Warner Bros Discovery Takeover Bid to All-Cash Offer
In a strategic move to strengthen its position in a high-stakes media acquisition battle, Netflix has enhanced its offer for Warner Bros Discovery (WBD) by switching to an all-cash proposal. This adjustment comes as the streaming giant faces a hostile takeover attempt from entertainment conglomerate Paramount, which has been aggressively pursuing WBD.
Details of the Revised Offer
The new all-cash bid, announced in a joint statement from Netflix and WBD, maintains the total deal value at $82.7 billion (£61.4 billion). However, it simplifies the transaction by eliminating a previous Netflix shares component, which had been part of the initial proposal. According to the statement, this change "simplifies" the purchase and "provides greater certainty of value" for WBD stockholders.
Key financial aspects of the offer include:
- The amount per WBD share remains unchanged at $27.75 (£20.63).
- This equates to a Netflix offer value of $72 billion (£53.50 billion) based on share price, with the total asset valuation at $82.7 billion.
- The shift to cash is intended to make the bid more attractive and clear for shareholders, especially as Netflix's share price has declined since the merger plans were first announced.
Accelerated Timeline and Shareholder Vote
The revised offer could lead to an "accelerated" timeline for a shareholder vote, potentially as early as April. This expedited process aims to provide WBD stockholders with a quicker resolution, contrasting with the ongoing competition from Paramount.
Paramount's hostile bid, which bypassed the WBD board to directly offer shareholders $30 (£22.30) cash per share, has been rejected by the board. In contrast, Netflix's offer to acquire the streaming portion of WBD's business has received unanimous recommendation from the WBD board to shareholders.
Regulatory Hurdles and Industry Impact
Even if shareholders approve either deal, regulatory approval will be required, adding another layer of complexity to this historic media merger. The outcome could significantly reshape the entertainment landscape, affecting TV, filmmaking, and cinema futures.
Potential implications include:
- If Netflix succeeds, it may lead to shorter theatre runs for films from WBD's production companies, aligning with Netflix's sceptical view on cinema longevity.
- If Paramount Skydance prevails, it would consolidate news services like CNN and CBS News under ownership linked to allies of US political figures, raising concerns about media concentration.
This bidding war underscores the intense competition in the streaming and media sectors, with billions at stake and far-reaching consequences for content creation and distribution.
