Netflix agreed to pay all cash for Warner Bros. Discovery, amending its $72 billion deal in an attempt to fight off Paramount’s hostile takeover bid.
Netflix originally agreed to buy the company with a mix of cash and stock. To sweeten the offer for shareholders, Netflix and Warner Bros. today announced that Netflix will pay all cash instead. If successful, Netflix’s purchase will include HBO Max, WB Studios, and other assets.
The price is unchanged at $27.75 per share, and Warner Bros. is targeting an April 2026 shareholder vote. The original plan was for Netflix to buy each Warner Bros. share with $23.25 in cash and $4.50 in Netflix stock.
The revised agreement “simplifies the transaction structure,” “accelerates the path to a WBD stockholder vote,” and “provides enhanced certainty around the value WBD stockholders will receive at closing, eliminating market-based variability,” today’s press release said. Netflix plans to finance the deal with “a combination of cash on hand, available credit facilities and committed financing.”
Netflix’s pending purchase of Warner Bros. has an equity value of $72 billion and an enterprise value of $82.7 billion, which includes both equity and debt. Paramount Skydance has been trying to upend the deal with its own offer to buy Warner Bros. in a hostile takeover attempt that includes a lawsuit it filed against Warner Bros. last week.
Paramount offered $108.4 billion at $30 per share, but it’s trying to buy the entire Warner Bros. Discovery company, while Netflix’s deal is for just the streaming and movie studios divisions. The Warner Bros. board wants to complete a separate spinoff of its cable TV division, which would not be possible if Paramount’s hostile takeover succeeds. The spinoff is scheduled to be completed before the closing of the sale to Netflix, and the spun-off entity would be called Discovery Global.
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