On January 14, the Financial Times reported that Netflix was preparing to modify the terms of its nearly $83 billion acquisition of Warner Bros. Discovery (WBD), changing it to an all-cash offer to fend off Paramount’s hostile takeover and speed up the completion of the deal.
Netflix
People familiar with the matter said Netflix revised the terms of the transaction to provide Warner Bros. shareholders with a faster and simpler transaction plan. However, people familiar with the matter also warned that the revision of the agreement is still under discussion and relevant plans may still change.
According to Netflix's original agreement with Warner Bros. in December, the deal valued Warner Bros. at $27.75 per share at the time, of which $4.50 would be paid in Netflix stock, for a total enterprise value of $82.7 billion. According to Bloomberg, if Netflix’s stock price falls below $97.91, the transaction will be adjusted accordingly. Netflix's shares have fallen by about a quarter since it began seeking to acquire Warner Bros. in October. Netflix shares fell as low as $89.07 in the New York stock market on Tuesday.
Warner Bros. shares rose 1.6% on Tuesday after Bloomberg reported that Netflix may revise the terms of the deal, a sign that the move was welcomed by Warner Bros. investors.
As of press time, representatives for Netflix and Warner Bros. did not respond to requests for comment, while Paramount declined to comment.