Netflix is readying a revised offer — in all cash — to acquire Warner Bros. Discovery‘s streaming and studios businesses, according to a report by the Wall Street Journal.
Under the terms of Netflix’s original agreement, each Warner Bros. Discovery shareholder would receive $23.25 in cash and $4.50 in shares of Netflix common stock for each share of WBD common stock outstanding at the closing of the transaction. That deal had an enterprise value of $82.7 billion.
Now, Netflix is prepared to switch to an all-cash offer, the Journal, which cited anonymous sources. Bloomberg News previously reported that Netflix was contemplating such a move.
A Netflix rep declined to comment. A WBD spokesman referred inquiries to Netflix.
Netflix’s reported change-up on the deal terms comes as David Ellison’s Paramount Skydance has continued to press its case to shareholders for why its $30/share all-cash hostile bid is superior to the Netflix pact. On Monday, Paramount filed a lawsuit seeking to compel WBD to disclose financial details of the Netflix deal including how it is valuing the proposed Discovery Global cable TV networks spin-off.
Shares of Netflix have falling more than 12% since the Warner Bros. deal was announced Dec. 5 — dropping below the “collar” of $97.91/share in the WBD agreement that would reduce the total value of the acquisition. Netflix’s stock closed at $90.32/share Tuesday, up 1% on the day.
According to Paramount’s Jan. 8 analysis, the total value of the Netflix transaction to WBD shareholders is $27.42/share, given the decline in Netflix’s share price since. Paramount Skydance alleges the Discovery Global spin-off shares would be worthless, when compared with Comcast’s Versant spin-off.
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From Variety US