In a significant development in the entertainment industry, Netflix has revised its offer for Warner Bros. Discovery’s (WBD) studio and streaming assets to an all-cash bid, as outlined in a recent SEC filing. The streaming giant has proposed to acquire WBD’s HBO Max platform and Warner Bros. film studio at a rate of $27.75 per WBD share, transitioning from an earlier offer that included both cash and stock valued at approximately $72 billion.
Ted Sarandos, co-CEO of Netflix, emphasized the unanimous support from WBD’s Board for the transaction, expressing confidence in the deal’s potential to benefit stockholders, consumers, creators, and the broader entertainment ecosystem. Sarandos highlighted the advantages of the cash offer, stating that it would facilitate a quicker timeline for shareholder approval and provide more financial certainty with the set cash price, which is further bolstered by the planned spinoff of Discovery Global.
The impetus for this swift transaction adjustment appears to stem from increasing pressure from Paramount Skydance, which is engaged in a hostile takeover bid for WBD that extends beyond its film and streaming operations to include valuable cable networks like CNN and TNT. Reports indicated that the timeframe for shareholder approval could now be moved up to late February or early March, a shift from earlier expectations of a spring or summer vote.
WBD’s board has previously advised its shareholders to reject Paramount’s overtures in favor of the Netflix deal, marking a consistent strategy to safeguard their position amid ongoing competitive pressures. Paramount, meanwhile, has taken legal action to gather information in support of its bid, and is also preparing for a proxy fight, aiming to put forward candidates for WBD’s board during the upcoming annual meeting in 2026.
Additionally, on the same day, WBD filed a preliminary proxy statement to garner shareholder approval for the agreement with Netflix. If sanctioned, the deal would lead to the separation of WBD’s cable networks into a newly established publicly traded entity, Discovery Global, with the split anticipated to occur within six to nine months prior to the finalization of the transaction with Netflix.
Investors are keenly awaiting Netflix’s earnings report later today, which could provide more insights into the ongoing sale process and how these strategic maneuvers may influence the company’s financial trajectory moving forward.
