Netflix has converted its offer for Warner Bros Discovery into an all-cash bid, while keeping the total price at $82.7 billion, in a move aimed at blocking rival Paramount Skydance’s attempt to acquire the Hollywood powerhouse.
The revised offer values Warner Bros at $27.75 per share and has received unanimous support from the HBO owner’s board, according to a regulatory filing. The deal consolidates Netflix’s prior cash-and-stock offer, which included $23.25 in cash and $4.50 in Netflix shares per Warner Bros share.
Both Netflix and Paramount Skydance are competing for Warner Bros’ film and television studios, extensive content library, and major franchises including Game of Thrones, Harry Potter, and DC Comics’ superheroes like Batman and Superman. Paramount has publicly sought to promote its $30-per-share cash offer as superior, but Warner Bros has rejected it, citing risks, costs, and uncertainties associated with the rival bid.
“Our revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty,” Netflix co-CEO Ted Sarandos said in a statement.
Netflix shares rose 1.2% before the market opened, while Paramount fell 1% and Warner Bros was little changed. Netflix stock has dropped nearly 15% since the merger announcement on December 5, closing at $88 per share on Friday, below the $97.91 floor price of its original offer—a point Paramount has used to argue the strength of its bid.
Warner Bros’ board also provided an updated valuation for Discovery Global, a planned spin-off that will house television assets including CNN, TNT Sports, and the Discovery+ streaming service. Warner Bros has maintained that a merger with Netflix is superior because its shareholders would retain a stake in Discovery Global, whereas Paramount’s offer would not include the cable spinoff. The board estimated Discovery Global’s value between $1.33 and $6.86 per share depending on future scenarios.
Paramount challenged the disclosure in Delaware court on January 12, seeking more information for investors, but the judge rejected the request, finding no evidence of irreparable harm. Paramount’s tender offer is set to expire on January 21. Analysts suggest that unless Paramount raises its bid, shareholder appeals are unlikely to succeed.
A Netflix merger would leave the combined company with roughly $85 billion in debt, compared with $87 billion under Paramount. Netflix’s investment-grade rating and market value of $402 billion, versus Paramount’s $12.6 billion, also make it a less leveraged and potentially safer option for shareholders. Netflix has additionally agreed to allow Warner Bros to reduce Discovery Global’s debt by $260 million.
Winning shareholder approval will be only the first step. Lawmakers have raised concerns about further media consolidation and its potential effects on consumer choice and pricing. Paramount executives have argued that their connections with former President Donald Trump could ease regulatory hurdles.
