Jan. 20 (UPI) — Netflix announced Tuesday that it has amended its bid to buy Warner Bros. Discovery to an all-cash offer to sweeten the deal for investors, continuing the battle between the streaming giant and Paramount.
The amended offer will allow WBD shareholders to vote sooner because stock deals require more disclosures and documentation. It also means that WBD investors don’t have to be concerned with Netflix’s changing stock price. The investor vote would have happened in spring or summer. Now, it could happen as early as late February.
WBD’s board has unanimously accepted the Netflix offer.
The deal is valued at $27.75 per WBD share. The deal’s equity value would be at $72 billion, with a total enterprise value of about $82.7 billion.
“Today’s revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world and with it even more people enjoying the entertainment they love to watch the most,” said David Zaslav, president and CEO of Warner Bros. Discovery, in a statement. “By coming together with Netflix, we will combine the stories Warner Bros. has told that have captured the world’s attention for more than a century and ensure audiences continue to enjoy them for generations to come.”
Ted Sarandos, co-CEO of Netflix, said, “Our revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty at $27.75 per share in cash, plus the value from the planned separation of Discovery Global. Together, Netflix and Warner Bros. will deliver broader choice and greater value to audiences worldwide, enhancing access to world-class television and film both at home and in theaters. The acquisition will also significantly expand U.S. production capacity and investment in original programming, driving job creation and long-term industry growth.”
In October, Warner Bros. said it was open to offers after getting several unsolicited ones. On Dec. 5, after a bidding war between Netflix and Paramount Skydance, Warner Bros. said it would accept Netflix’s offer.
A week later, Paramount launched a hostile bid to buy WBD. The WBD board told shareholders not to accept the Paramount bid because Oracle creator Larry Ellison, father of Paramount CEO David Ellison, wasn’t backing it. On Dec. 22, Paramount said that it has Larry Ellison’s backing of $40 billion in equity. Now, Netflix is amending its offer to be more attractive to shareholders.
WBD is also changing the segment it plans to spin off into its own company. WBD is planning to take its cable business, with channels like CNN and TNT, and make it a separate, publicly traded company. Paramount’s purchase offer included that segment of the Warner Bros. portfolio. With the revised deal, Warner Bros. announced it will reduce the debt of that business by $260 million, The New York Times reported.
COMMENTS
Please let us know if you're having issues with commenting.