Netflix Weighs All-Cash Deal for Warner Bros.
Recent discussions indicate that Netflix is considering an all-cash deal for Warner Bros. studios and streaming assets. This shift comes amidst ongoing tensions with Paramount, which is currently pushing its own all-cash offer for Warner Bros. Discovery.
Negotiations and Offers
According to a Bloomberg report, Netflix’s proposed deal originally included a combination of cash and stock. The company initially offered $27.75 per share, which breaks down to $23.25 in cash and $4.50 in Netflix shares.
Paramount’s Competing Offer
- Paramount has made a $30-per-share all-cash offer for Warner Bros. Discovery.
- They assert this offer is superior to the Netflix agreement.
- A deadline set for January 21 encourages WBD stockholders to consider Paramount’s offer.
Board Responses and Legal Actions
The Warner Bros. Discovery (WBD) board has twice advised its shareholders against Paramount’s offer, reinforcing its commitment to Netflix. In response, Paramount filed a lawsuit in Delaware Chancery Court to obtain documentation on WBD’s decision-making process regarding the Netflix deal.
Proxy Fight Plans
Paramount intends to initiate a proxy fight, proposing its own candidates for election to the WBD board. This move aims to challenge the Netflix arrangement from within. Meanwhile, Warner Bros. has characterized this legal action as “meritless” and maintains that a merger with Paramount poses higher risks for the company and its shareholders.
Market Reactions
Amid the competitive landscape, Netflix’s stock showed signs of resilience, rising by 1% despite the overall market downturn. This indicates investor confidence in Netflix even as acquisition discussions unfold.
As the situation develops, both streaming giants are poised for a strategic showdown to determine the future of Warner Bros. and its valuable assets.
