Netflix announced its modified all-cash bid for Warner Bros. Discovery on Tuesday after Paramount Skydance continued to threaten a hostile takeover of the Hollywood studio.
Warner Bros. is trying to sell its film and streaming assets to Netflix after its initial cash-and-stock deal was announced in early December. Netflix changed its offer to an all-cash transaction, reiterating its commitment to buying Warner Bros. Both deals were valued at $27.75 per share.
In a joint statement, Netflix and Warner Bros. said the revised offer provides greater value certainty and accelerates the timeline for a stockholder vote. A vote on the new transaction is expected by April.
“Our revised all-cash agreement demonstrates our commitment to the transaction with Warner Bros. and provides WBD stockholders with an accelerated process and the financial certainty of cash consideration, while maintaining our commitment to a healthy balance sheet and our solid investment grade ratings,” Netflix co-CEO Greg Peters said.
Samuel DiPiazza Jr., Warner Bros. board of directors chairman, added that the media conglomerate looks forward to engaging with “our investors about the compelling benefits of the transaction as we progress toward our stockholder vote on an accelerated timeline.”
Warner Bros. still intends to spin off its cable networks housed under the Discovery Global name. The separation between Warner Bros. and Discovery Global is expected to be completed in six to nine months before the proposed Netflix-Warner Bros. merger closes, according to their prepared statement.
Both companies noted their respective boards unanimously approved the amended, all-cash bid.
The game-changing announcement comes after Paramount launched a multipronged attack against the agreement between Netflix and Warner Bros.
Last week, the competing bidder filed a lawsuit to compel Warner Bros. to share more information about its sale process and pending deal with Netflix. A Delaware judge declined Paramount’s motion to expedite the legal proceeding, concluding the company failed to demonstrate it suffered irreparable harm from an alleged lack of information by Warner Bros.
Paramount believes Warner Bros. was biased in favor of Netflix from the start of the bidding war. In his appeal to Warner Bros. shareholders, Paramount CEO David Ellison argues his company’s deal is superior to the one made by Netflix.
JUDGE DECLINES PARAMOUNT REQUEST TO EXPEDITE WARNER BROS. LAWSUIT
Additionally, Paramount intends to start a proxy fight by nominating its directors to the Warner Bros. board ahead of its annual stockholder meeting. The nomination process is set to get underway in about two weeks.
Warner Bros. has repeatedly rejected Paramount’s efforts to mount a hostile takeover, and it intends to stick with Netflix based on Tuesday’s revised offer.