Netflix Mulls Cash-Only Deal with Warner Bros., Says Report
Recent discussions suggest that Netflix is considering an entirely cash-based proposal for its agreement with Warner Bros. This new approach comes amid competition from Paramount, which has made a $30-per-share cash offer for Warner Bros. Discovery, asserting its deal is more favorable than Netflix’s current proposal.
Current Netflix Offer for Warner Bros.
At present, Netflix’s offer consists of $27.75 per share for Warner Bros., with a cash component of $23.25 and an additional $4.50 in Netflix stock. This arrangement contrasts sharply with Paramount’s all-cash bid, which has been positioned as superior.
- Netflix current offer: $27.75 per share
- Cash component: $23.25
- Shares component: $4.50
- Paramount’s offer: $30 per share in cash
Paramount’s Strategy and Legal Actions
Paramount is aggressively pursuing its objectives, launching a campaign urging Warner Bros. Discovery stockholders to consider their cash offer by January 21. The Warner Bros. board has twice recommended that shareholders reject Paramount’s overtures, reaffirming their commitment to the existing agreement with Netflix. In response, Paramount has taken legal action against the Warner Bros. board in Delaware Chancery Court.
This lawsuit aims to obtain documentation regarding Warner Bros.’ decision-making process in choosing Netflix over Paramount. Furthermore, Paramount is preparing for a proxy battle, intending to nominate its own candidates for the Warner Bros. board in an effort to challenge the Netflix deal from within.
Responses and Market Reactions
Warner Bros. has dismissed Paramount’s legal claims, labeling them as meritless and contending that a merger with Paramount presents higher risks for its shareholders. Interestingly, many stakeholders are surprised that Paramount has not increased its cash offer beyond $30 per share.
Despite the ongoing takeover negotiations, Netflix shares experienced a slight uptick, closing 1% higher, marking a contrast to broader market trends which were down during this period. A representative from Netflix has opted not to comment on these developments.
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