Netflix Moves Forward with All-Cash Bid for Warner Bros Discovery Assets
Netflix is reportedly preparing an all-cash offer to acquire Warner Bros Discovery's film studios and streaming operations. According to a Reuters report, this move aims to accelerate a sale that has faced opposition from competing bidders and politicians.
Bidding War Intensifies Between Netflix and Paramount
The development comes after Warner Bros Discovery shrugged off several bids from Paramount. Sources cited by Reuters claim Netflix's all-cash deal seeks to finalize an agreement that may still take months to close.
Netflix's deal values the assets at $82.7 billion, bundling both Warner Bros' film arm and its streaming unit with a mix of cash and stock. In contrast, Paramount's offer stands at $108.4 billion purely in cash for the entire company, including its cable TV operations.
Warner Bros Shows Preference for Netflix's Proposal
Despite amendments to Paramount's bid, which included a $40 billion equity backing by Oracle co-founder Larry Ellison, Warner Bros has preferred Netflix's deal. Ellison is also the father of Paramount CEO David Ellison.
Warner Bros' board has argued that Paramount's offer depends on significant debt financing, increasing the risk of completing the deal. The board maintains that Paramount's offer remains inadequate.
Valuable Entertainment Properties at Stake
Paramount and Netflix have engaged in intense competition to acquire Warner Bros, its valuable movie and television studios, and its massive content library. Warner Bros' popular entertainment properties include:
- Harry Potter
- Game of Thrones
- Friends
- The DC Comics universe
- Highly valued classic films such as Casablanca and Citizen Kane
The bidding war has become Hollywood's most closely watched takeover battle. Studios are navigating an industry increasingly controlled by streaming services and unpredictable box-office earnings.
Political and Regulatory Concerns Emerge
Meanwhile, US lawmakers from both parties have expressed concern that further media consolidation could raise prices and give consumers fewer choices.
Paramount Files Lawsuit Against Warner Bros
Earlier this week, Paramount sued Warner Bros for more information on its deal with Netflix. Paramount also said it planned to nominate directors to Warner Bros' board.
Paramount has argued that its all-cash bid of $30 per share for all of Warner Bros is superior to Netflix's cash-and-stock offer of $27.75 per share for the studios and streaming assets. Paramount claims its offer will more easily pass regulatory approval.
Termination Fees Add Complexity
Netflix has agreed to a $5.8 billion termination fee if it cannot obtain regulatory approval. Conversely, Warner Bros would be required to pay Netflix a $2.8 billion termination fee for abandoning their agreement.
The situation continues to evolve as these media giants compete for control of one of Hollywood's most prized collections of entertainment assets.
