Netflix has upped the pressure in the battle for Warner Bros Discovery, switching to an all-cash offer valued at $82.7 billion, a move designed to shut down rival overtures from Paramount and Skydance.
The revised deal values Warner Bros. Discovery’s studio and streaming assets at $27.75 per share in cash, replacing Netflix’s earlier cash-and-stock structure. While the price tag remains unchanged, the new terms offer shareholders immediate liquidity and greater certainty at a moment when Netflix’s own stock has been volatile.
According to a regulatory filing on Tuesday, Warner Bros Discovery’s board has unanimously backed the all-cash offer, clearing the way for a shareholder vote expected by April.
“Our revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty,” said Ted Sarandos, co CEO of Netflix.
The move comes as Paramount Skydance continues its aggressive push to derail the deal, pitching its own $ 30-per-share cash bid as superior. Warner Bros Discovery has repeatedly rejected that offer, arguing that it undervalues the company and fails to account for the upside of a planned cable spin-off.
Netflix and Paramount are both chasing Warner Bros Discovery for its film and television studios, deep content library, and blockbuster franchises, including Game of Thrones, Harry Potter, and DC’s superhero universe.
Netflix’s decision to go all cash also neutralizes one of Paramount’s central arguments. Netflix shares have fallen nearly 15 percent since the merger was announced in December, dropping below the floor price used in the original stock component of the bid. By eliminating equity from the deal, Netflix removes that risk entirely.
Warner Bros Discovery’s board emphasized that the Netflix offer provides certainty from an investment-grade company and allows shareholders to retain exposure to a separate entity, Discovery Global, which will house cable assets, including CNN, TNT Sports, and Discovery Plus. The board disclosed valuation scenarios for Discovery Global ranging from $1.33 to $6.86 per share, depending on future deal activity.
Paramount has dismissed the cable spin-off as effectively worthless and recently sought a court order to force additional disclosures ahead of its tender offer expiration on January 21. A Delaware judge rejected that request earlier this month.
From a balance sheet perspective, a Netflix Warner Bros combination would carry roughly $85 billion in debt, slightly less than a Paramount-led transaction. Netflix’s leverage ratio would remain under four, compared with an estimated seven under Paramount, and Netflix’s investment-grade credit rating stands in contrast to Paramount’s junk-rated bonds.
Netflix has also agreed to allow Warner Bros Discovery to reduce the debt assigned to Discovery Global by $260 million, further sweetening the deal.
While shareholder approval appears increasingly likely, regulatory scrutiny could prove the next hurdle. Lawmakers across the political spectrum have raised concerns about further media consolidation and its impact on pricing and consumer choice. Paramount’s backers have argued that their political relationships could ease that path, though there are no guarantees.
For now, Netflix’s all-cash pivot sends a clear message: it intends to win this deal outright and end the bidding war on its terms.
REELated:
Trump bought Netflix, WBD bonds days after megadeal
