Netflix revises offer for Warner Bros to all-cash
Netflix is revising its offer for Warner Bros Discovery to make it an all-cash transaction.
Netflix first offered a cash and stock deal worth US$27.75 per Warner Bros share, putting the company’s total enterprise value at US$82.7bn (A$A122.8bn) including debt.
Netflix and Warner Bros. said on Tuesday that the revised deal simplifies the transaction structure, provides greater value certainty to Warner Bros. shareholders and accelerates the path to a Warner Bros. shareholder vote.
The all-cash transaction is still valued at $27.75 per Warner Bros. share, the companies said.
Warner Bros shareholders will also receive additional value for their shares following Discovery Global’s separation from Warner Bros.
“Together, Netflix and Warner Bros. will deliver broader choice and greater value to audiences around the world, increasing access to premium television and movies both at home and in theaters,” Netflix Co-CEO Ted Sarandos said in a statement.
“This acquisition will also significantly increase U.S. production capacity and investment in original programming, accelerating job creation and long-term industry growth.”
Warner Bros had previously announced that it would split Warner Bros and Discovery Global into two separate publicly traded companies.
The separation is expected to be completed within six to nine months before the proposed Netflix and Warner Bros deal closes.
The transaction with Netflix is expected to be completed within 12 to 18 months from the date Netflix and Warner Bros. enter into the merger agreement.
Both companies’ boards of directors approved the amended all-cash deal.
Netflix was in contention with Paramount Skydance for Warner Bros.; Paramount took another step in its bid to buy Warner Bros. last week, saying it would name its own slate of directors before the Hollywood studio’s next shareholders meeting.
Paramount also filed suit in Delaware Chancery Court, seeking to force Warner Bros. to disclose to shareholders how it values its bid and a rival bid from Netflix.
Warner’s leadership has repeatedly turned down offers from Paramount and called on shareholders to support the sale of its streaming and studio businesses to Netflix.
Paramount, meanwhile, has made efforts to soften its hostile $77.9 billion bid for the entire company.
