In a race against time and a wealthy rival, Netflix is modifying its $83 billion bid for Warner Bros Discovery to an all-cash payment. The primary objective is speed: Netflix wants to expedite the acquisition of WBD’s studio and streaming businesses to prevent Paramount Skydance from disrupting the agreement with a hostile takeover attempt.
The urgency stems from Paramount’s persistent efforts to derail the Netflix deal. Backed by the Ellison family, Paramount has tabled a $108.4 billion offer. Although WBD’s board rejected this as financially unsound due to high debt levels, Paramount is not backing down and is seeking to install new board members to force a change in strategy.
Netflix’s original proposal involved a complex mix of cash, stock, and equity in a new company comprising WBD’s cable networks like CNN and Discovery. Transitioning to all-cash simplifies the transaction for shareholders and regulators, potentially shaving weeks or months off the closing date. This is crucial in a volatile market where prolonged negotiations can invite further disruption.
The acquisition would grant Netflix control over massive franchises like Harry Potter and the DC Universe, along with the prestige drama of HBO. This concentration of content power has drawn the ire of regulators and industry figures, who fear it will decimate competition. Critics point out that the merged entity would command a near-monopoly on premium streaming content.
Despite the regulatory shadows, the market reaction has been positive. WBD stock rose 1.6% and Netflix gained 1% as traders bet on the deal’s success. For Netflix, the move is a clear signal that they are willing to pay a premium in liquidity to secure their position as the undisputed king of streaming.