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Netflix has revised its plan to buy Warner Bros. film studio, shifting from a $72 billion cash-and-stock deal to an all-cash offer.
What is happening: earlier, shareholders were set to receive $23.25 in cash plus $4.50 in Netflix stock per share. Under the new terms, Netflix will pay $27.75 for each Warner Bros. Discovery share entirely in cash, removing stock from the equation.
This change lifts the total transaction value to about $83 billion, reflecting the higher cash payout, a simpler structure and faster approvals.
The future plans: Warner Bros. Discovery (WBD) has asked its shareholders for approval to go ahead with the Netflix deal by filing paperwork with the US regulator.
If the deal happens, WBD’s cable TV businesses will be split off into a new, separate company called Discovery Global, which will be listed on the stock market. In a recent filing, Warner Bros. shared estimates of what Discovery Global might be worth as a standalone company.
Depending on how it is valued, the share price could range from $1.33 to $6.86. This big gap is now a key point of dispute between the companies.
Paramount’s response: Paramount, which has made a higher hostile takeover bid than Netflix, has taken Warner Bros. Discovery to court, seeking more details on how Discovery Global was valued.
Paramount has also altered its terms and engaged in an aggressive media campaign to try to convince shareholders that its bid is superior. Warner Bros. Discovery has confirmed it will hold a special shareholder meeting to decide the deal’s fate.
Reuters
