In a move that could accelerate the completion of a major media merger, Netflix has revised its proposal to acquire the studio and streaming assets of Warner Bros. Discovery (WBD). The streaming company has now offered an all-cash deal worth $82.7 billion (£61.5 billion), up from its previous cash-and-share proposal.
The revised agreement, first reported last week, is aimed at “simplifying the transaction structure, providing greater certainty of value for WBD shareholders, and accelerating the path to a WBD shareholder vote,” the companies said in a joint statement. Under the new terms, WBD investors could vote on the deal as early as April.
“Our revised all-cash agreement will enable an expedited timeline to a shareholder vote and provide greater financial certainty at $27.75 per share in cash, plus the value from the planned separation of Discovery Global,” said Ted Sarandos, Netflix’s co-chief executive.
The WBD board continues to unanimously support and recommend the Netflix transaction, expressing confidence that it will deliver the best outcome for shareholders, consumers, creators, and the broader entertainment community.
The move comes as Paramount is pursuing a hostile $108.4 billion cash takeover of the entire WBD, seeking to override the board’s agreement with Netflix. Paramount has filed a lawsuit and plans to nominate directors to the WBD board in an attempt to derail the Netflix deal.
Under the terms of the Netflix agreement, WBD would have to pay a $2.8 billion breakup fee if it walked away. Paramount’s revised offer also involved increasing its termination fee to $5.8 billion, matching Netflix’s.
However, WBD has stated that accepting the Paramount deal would incur $4.7 billion in costs, including the breakup fee to Netflix, additional interest on debt, and a $1.5 billion fee for failing to complete a debt exchange.
The outcome of this high-stakes battle for control of WBD’s prized assets, including Warner Bros. studios, HBO, and the Discovery Channel, will have significant implications for the future of the media and entertainment industry.
