Netflix goes all-cash in Warner Bros. Discovery offer
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Netflix and Warner Bros. Discovery on Tuesday said Netflix's merger offer for the Warner Bros. studio and streaming business will now be all-cash instead of cash and stock.
Why it matters: The companies say the new structure is simpler and can close faster — an effort to get a deal done quickly, as Paramount Skydance ramps up the pressure with its own hostile WBD offer.
Catch up quick: WBD in December said it agreed to a cash-and-stock deal to sell its studio and streaming business to Netflix for $27.75 per WBD share.
- The new all-cash offer is at the same price. Netflix said it would fund the offer with cash on hand, plus credit facilities and committed financing.
- Paramount's all-cash bid — which included all of WBD, not just its studio and streaming assets — valued WBD at $30 per share.
- WBD cited risks associated with the financing structure of Paramount's bid for rejecting Paramount's solicited and hostile offers.
Between the lines: Paramount, arguing its bid was better for shareholders, has started to take legal action against WBD in its pursuit of the asset.
- Paramount last week filed a lawsuit to force the company to disclose "basic information" about the bidding process to enable shareholders to "to make an informed decision as to whether to tender their shares into our offer."
- It also tipped a proxy fight against Warner Bros. Discovery's board, saying it intends to nominate directors in a few weeks.
Of note: A Delaware judge on Thursday rejected Paramount's request to expedite its lawsuit against Warner Bros. Discovery, arguing the media giant didn't suffer irreparable harm from WBD.
- In a statement, Warner Bros. Discovery said the lawsuit "was yet another unserious attempt to distract and the Judge saw right through it."
- "Despite its multiple opportunities, Paramount Skydance continues to propose a transaction that our board unanimously concluded is not superior to the merger agreement with Netflix."
What's next: The revised transaction structure is expected to enable WBD stockholders to vote on the proposed deal by this April, Warner Bros. said in a statement.
