Netflix explores all-cash offer as Warner Bros. takeover battle heats up
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Netflix Inc. is reworking the terms of its proposed acquisition of Warner Bros. Discovery Inc. and has discussed making an all-cash offer for the studio and streaming businesses, as it looks to push through a transaction that could take months to close amid rising opposition.
According to a Bloomberg report, the revised structure is aimed at expediting the sale at a time when the deal has drawn resistance from politicians, divided institutional investors, and a rival bidder—Paramount Skydance Corp.
Stock volatility and financing capacity drive all-cash consideration
Under the original agreement, Warner Bros. shareholders were to receive $23.25 in cash and $4.50 in Netflix stock, with downside protection if Netflix shares fell below $97.91. Since Netflix’s pursuit of Warner Bros. began in October, its stock has lost about 25%, hitting a low of $89.07 earlier this week—raising questions over the attractiveness of the stock component and strengthening the case for an all-cash structure.
Netflix has already lined up $59 billion in bridge financing from Wall Street banks—one of the largest such facilities on record—and has refinanced around $25 billion with longer-term debt. In a research note, Bloomberg Intelligence analyst Stephen Flynn said Netflix’s balance sheet remains strong, with modest leverage and capacity to take on additional debt without undermining its ratings.
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Paramount intensifies takeover challenge with rival bid and legal action
Warner Bros.’ decision in early December to back Netflix’s bid has since triggered an aggressive counter-move from Paramount. Paramount CEO David Ellison, along with his father Larry Ellison, has launched a tender offer for Warner shares, personally guaranteed $40.4 billion of financing, and initiated legal action seeking greater disclosure around Netflix’s valuation and deal terms. Paramount has also signalled plans to nominate directors to the Warner Bros. board in a bid to derail the transaction.
Paramount Skydance has now said it plans to formally nominate directors to Warner Bros. Discovery’s board to vote against approving the merger with Netflix, while also filing a lawsuit to compel greater disclosure to shareholders. In a letter sent to investors, Paramount reiterated that it is sticking to its $30-a-share all-cash offer and urged shareholders to tender their stock, warning that the outcome could ultimately hinge on a shareholder vote if the board does not engage. Paramount has accused Warner Bros. of failing to adequately explain how it values its cable TV assets—set to be spun off ahead of the Netflix deal—and said fuller disclosures are essential for shareholders to make an informed decision.
Hollywood’s biggest takeover battle
The battle for Warner Bros. has become one of Hollywood’s most closely watched takeover contests, pitting streaming-led consolidation against traditional studio models. With prized franchises such as Harry Potter, Game of Thrones, Friends, and the DC universe at stake, the outcome could reshape the balance of power in global entertainment—at a time when regulators and lawmakers are increasingly wary of further media concentration.