Netflix is revising its $72 billion bid for Warner Bros. Discovery to make it an all cash transaction.
Netflix initially pitched a cash and stock deal valued at $27.75 per Warner Bros. share, giving it a total enterprise value of $82.7 billion, including debt.
Netflix and Warner Bros. said on Tuesday that the revised agreement simplifies the structure of the transaction, provides more certainty of value for Warner Bros. shareholders and speeds the way for a Warner Bros. shareholder vote.
The companies said the all-cash transaction is still valued at $27.75 per Warner Bros. share. Warner Bros. shareholders will also receive the additional value of Discovery Global shares following its separation from Warner Bros.
“Together, Netflix and Warner Bros. will deliver broader choice and greater value to audiences around the world, enhancing access to world-class television and movies both at home and in theaters,” Ted Sarandos, co-CEO of Netflix, said in a statement. “The acquisition will also significantly expand US production capacity and investment in original programming, driving job creation and long-term industry growth.”
Warner Bros. previously announced that it would separate Warner Bros. and Discovery Global into two separate publicly traded companies. The separation is expected to be completed in six to nine months, ahead of the closing of the proposed Netflix and Warner Bros. deal. The transaction with Netflix is expected to close 12 to 18 months from the date Netflix and Warner Bros. originally entered into their merger agreement.
The boards of both companies approved the amended all-cash deal.
Netflix has been tussling with Paramount Skydance for Warner Bros., with Paramount taking another step in its hostile takeover bid for Warner Bros. last week, saying it will name its own slate of directors ahead of the Hollywood studio’s next shareholder meeting.
Paramount also filed a lawsuit in Delaware Chancery Court to force Warner Bros. to disclose to shareholders how it values its offer and the competing offer from Netflix.
Warner management has repeatedly rejected overtures from Paramount – and urged shareholders to support the sale of its streaming and studio business to Netflix. Paramount, meanwhile, has made efforts to sweeten its hostile $77.9 billion offer for the entire company.
Netflix stock was up 1.3% before the market opened, while Warner Bros. Discovery shares were slightly lower.