In a dramatic escalation of the ongoing media consolidation battle, streaming titan Netflix has substantially increased its all-cash offer to acquire the studio and streaming divisions of Warner Bros Discovery. The revised bid, now standing at $27.75 (£20.64) per share in pure cash, marks a significant enhancement from the previous agreement and intensifies the corporate contest with rival bidder Paramount Skydance.
A Strategic Move to Reshape Entertainment
The enhanced proposal aims to secure Warner Bros' coveted and extensive film and television library, alongside its premium HBO Max streaming service. This acquisition, if successful, possesses the potential to fundamentally reshape the global entertainment landscape, consolidating vast content portfolios under a single streaming powerhouse.
This new offer represents a clear shift in strategy. Back in December, the initial agreement involved Netflix paying $23.25 in cash plus $4.50 (£3.35) worth of Netflix stock per share for the Warner Bros assets, valuing the business at approximately $82.7 billion (£61.5 billion). The move to an all-cash structure is seen as a decisive step to provide greater financial certainty to Warner Bros Discovery shareholders.
Navigating a Competitive Bidding War
The revised bid comes amidst a fierce takeover struggle. Paramount Skydance had previously launched a hostile bid for the entirety of Warner Bros Discovery, offering $30 per share in cash. Crucially, this competing proposal was for the entire company, not just its studio and streaming divisions, highlighting a fundamental divergence in acquisition strategies between the two suitors.
Despite the higher headline figure from Paramount, Warner Bros Discovery's leadership continues to express a clear preference for the Netflix deal. Analysts have noted that the new, simplified all-cash terms from Netflix are particularly favourable for Warner Bros investors, especially in light of Netflix's share price having dropped by nearly 15 percent since the original deal was announced.
Leadership Backs the Revised Agreement
David Zaslav, President and Chief Executive of Warner Bros Discovery, voiced strong support for the impending merger with Netflix. He stated: "Today's revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world and with it even more people enjoying the entertainment they love to watch the most. By coming together with Netflix, we will combine the stories Warner Bros has told that have captured the world's attention for more than a century and ensure audiences continue to enjoy them for generations to come."
Greg Peters, Co-Chief Executive of Netflix, emphasised the strategic rationale behind the amended agreement. He commented: "By amending our agreement today, we are underscoring what we have believed all along: not only does our transaction provide superior stockholder value, it is also fundamentally pro-consumer, pro-innovation, pro-creator and pro-growth. Our revised all-cash agreement demonstrates our commitment to the transaction with Warner Bros and provides WBD stockholders with an accelerated process and the financial certainty of cash consideration, while maintaining our commitment to a healthy balance sheet and our solid investment grade ratings."
Final Hurdles and Contingencies
The agreed deal remains subject to specific conditions. It is contingent upon Warner Bros Discovery successfully completing a proposed spin-off of its cable television channels. This portfolio includes prominent networks such as CNN, TBS, and in the UK, TNT Sports. The completion of this corporate separation is a key step before the Netflix acquisition can be finalised, setting the stage for one of the most significant media mergers in recent history.
