Netflix settles for cash deal with Warner Bros. Discovery
The struggle for ownership is not over yet.
According to Axios, Netflix and Warner Bros. Discovery announced Tuesday that Netflix’s merger offer for Warner Bros.’ studio and streaming businesses will now be paid for in cash, rather than cash and stock.
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The companies say the new structure is simpler and can be completed more quickly, aiming to close the deal quickly as Paramount Skydance ratchets up the pressure with its hostile bid for WBD.
In December, WBD announced that it had agreed to sell its studio and streaming business to Netflix for $27.75 per WBD share, in a cash and stock deal.
The new all-cash offering is for the same price. Netflix said it will fund the offering with available cash, lines of credit, and committed financing.
Paramount’s all-cash offer, which included all of WBD, not just the studio and broadcasting assets, valued WBD at $30 per share.
WBD cited risks associated with the financing structure of Paramount’s proposal, rejecting Paramount’s solicited and hostile bids.
Paramount, arguing that its offer was better for shareholders, initiated legal action against WBD to take over the assets.
Paramount last week filed a lawsuit to force the company to disclose “basic information” about the bidding process to enable shareholders to “make an informed decision as to whether to tender their shares into our offer.”
It also sparked a fight with the Warner Bros. Discovery board via proxies, saying it intended to nominate a director within weeks.
A Delaware judge on Thursday rejected Paramount’s request to expedite the trial of its lawsuit against Warner Bros. Discovery, saying the media giant has not suffered irreparable harm from WBD.
In a statement, Warner Bros. Discovery said the lawsuit “was yet another unserious attempt to distract, and the Judge saw right through it.” “Despite its multiple opportunities, Paramount Skydance continues to propose a transaction that our board unanimously concluded is not superior to the merger agreement with Netflix.”
The revised deal structure is expected to allow WBD shareholders to vote on the proposed deal by April of this year, Warner Bros. said in a statement.
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