Netflix's Bold Move: A Cash-Only Bid for Warner Bros Discovery

Netflix has secured board approval for its revised all-cash offer of $82.7 billion to acquire Warner Bros Discovery's studio and streaming units. The deal emphasizes financial stability with immediate liquidity for Warner Bros shareholders. Despite Paramount's competing bid, Netflix's offer is favored for its financial solidity and investment-grade rating.

Netflix has proposed an amended all-cash offer of $82.7 billion for Warner Bros Discovery's studio and streaming businesses, gaining unanimous support from Warner Bros' board. The deal will pay Warner Bros shareholders $27.75 per share in cash, offering certainty of value with immediate liquidity following the merger.

The streaming leader had initially offered mixed cash and stock terms, but opted for a fixed cash offer citing investment-grade qualifications to strengthen the deal. Netflix's shares experienced a 15% decline post-announcement, settling below the original bid's floor price. Meanwhile, Warner Bros' board revealed its valuations for the Discovery Global spin-off, maintaining Netflix's proposal as superior to Paramount's rival bid due to retained investor stakes.

Warner Bros dismissed Paramount's $30-per-share cash offer, highlighting associated risks and uncertainties while comparing the resultant debt levels. Netflix promises less leverage and a robust credit rating. Though Paramount sought to expedite disclosures about Warner Bros' cable business, a judge dismissed their request, reinforcing Netflix's advantage in this merger battle.

(With inputs from agencies.)