Netflix and Warner Revise Deal to All-Cash Agreement
Warner Bros. Discovery has adjusted its agreement with Netflix, converting it to an all-cash deal. This change eliminates the stock component previously included in the merger agreement.
Details of the All-Cash Agreement
The revised deal values WarnerMedia at $27.75 per share, consistent with its valuation announced last December. Despite the change, Netflix plans to finalize the split within six to nine months, allowing it to take over Warner’s studio and streaming operations.
Implications for Shareholders
Both companies claim that the new structure of the agreement enhances certainty for Warner Bros. Discovery’s shareholders. It aims to eliminate market-based fluctuations that could affect stock performance.
Since the announcement of this all-cash deal, Netflix’s share price has fallen by over 12%. In a statement, David Zaslav, President and CEO of Warner Bros. Discovery, highlighted the potential of this merger.
Leadership Support and Future Plans
Zaslav, who stands to earn nearly $500 million from this transaction, emphasized the collaboration between the two iconic companies. He stated, “Today’s revised merger agreement brings us even closer to combining two of the greatest storytelling companies.”
The boards of directors at both Netflix and Warner Bros. Discovery have unanimously approved this all-cash transaction. A shareholder vote regarding the agreement is anticipated in April.
Concerns from Exhibitors
Despite the enthusiastic support from leadership, questions remain regarding Netflix’s commitment to preserving the current 45-day theatrical window. This issue has raised skepticism among exhibitors, who are closely monitoring developments.
