Netflix has amplified its pursuit of Warner Bros Discovery by proposing an all-cash bid valued at $82.7 billion, a strategic move intended to sideline competitor Paramount Skydance and fast-track shareholder acceptance.
In a regulatory disclosure made on Tuesday, the streaming powerhouse announced that the enhanced bid, set at $27.75 per share, has garnered unanimous support from the board of Warner Bros Discovery. Although the deal's structure has been modified, its overall valuation remains unchanged.
Both Netflix and Paramount Skydance have been vying for Warner Bros Discovery, drawn by its film and television production capabilities, extensive content library, and globally recognized franchises such as Game of Thrones, Harry Potter, and the DC Comics universe, including iconic figures like Batman and Superman.
The transition to an all-cash bid seems aimed at neutralizing Paramount’s rival offer. The consortium led by David Ellison at Paramount Skydance has updated its bid terms recently and initiated an aggressive media campaign to convince shareholders that its proposal offers superior value. Nonetheless, Warner Bros Discovery has thus far rejected these overtures and has opted not to comment on Netflix's revised offer.
Netflix indicated that Warner Bros Discovery will hold a special meeting for shareholders to vote on the acquisition, expected to occur by April.
"Our updated all-cash proposal will facilitate a quicker path to a stockholder vote and ensure more financial certainty," stated Ted Sarandos, Netflix’s co- CEO.
Initial market reactions were mixed; Netflix shares rose by 0.9% ahead of its quarterly earnings report, set to be released after market hours, while Paramount’s shares dropped by 1.9%. Warner Bros Discovery stock also saw a decline of 0.5%.
Despite the board's support for Netflix's bid, some investors believe that the contest remains unresolved. Alex Fitch, a portfolio manager at Harris Oakmark—Warner Bros Discovery’s fifth-largest shareholder, holding approximately 96 million shares as of September 30—asserted that the modified deal only increases the pressure on Paramount.
"This latest agreement increases the stakes," Fitch remarked. "The adjustments demonstrate Netflix's commitment to winning this bid, and the hastened shareholder vote indicates that Paramount must act promptly. It is now up to Paramount to present a clearly superior offer if they aim to secure the deal."
As the shareholder approval process approaches, the competition for one of Hollywood's most influential content empires seems to be entering a critical stage.
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