Netflix revises offer to pay all cash for Warner Bros. to fend off Paramount

Netflix has revised its acquisition proposal for Warner Bros. Discovery (WBD), opting to pay entirely in cash in a move aimed at strengthening its appeal to the media company’s shareholders. The change replaces the earlier cash-and-stock arrangement that Netflix had previously agreed upon with WBD’s board.

Despite the updated payment structure, the streaming company has left the overall valuation unchanged. Netflix is still offering $27.75 per share for Warner Bros. Discovery’s film studio and streaming businesses, maintaining the deal’s total valuation at approximately $82.7 billion.

According to a joint statement released Tuesday, the revised all-cash bid is intended to simplify the transaction and provide greater clarity on the value certainty for shareholders. The companies also said the new structure would accelerate the process leading up to a shareholder vote. Netflix confirmed that it plans to fund the acquisition through a combination of existing cash reserves, new debt, and committed financing arrangements.

The decision comes as competitive pressure intensifies from Paramount Skydance, which has stepped up its pursuit of Warner Bros. Discovery with a higher, all-cash proposal. Paramount is offering $30 per share for the entire company and has bolstered its bid with a $40 billion financial backstop provided by its CEO David Ellison’s father, billionaire Oracle co-founder Larry Ellison.

Paramount has been attempting to acquire Warner Bros. Discovery for several months and recently escalated the dispute by filing a lawsuit seeking additional disclosures related to Netflix’s offer. The company also announced plans to nominate new directors to WBD’s board after its proposal was repeatedly rejected. Paramount requested an expedited legal process, but the court denied the request.

Until now, Netflix had stood by its original mixed-payment offer while retaining the full support of Warner Bros. Discovery’s board, which has consistently dismissed Paramount’s bids. WBD has argued that a deal with Netflix represents a more stable outcome, citing Netflix’s financial strength and ability to execute the transaction. The company has also warned that Paramount’s proposal carries significantly higher risk, particularly due to the potential burden of roughly $87 billion in combined debt following the merger.

Warner Bros. Discovery has further questioned Paramount’s post-acquisition viability, noting that taking on additional debt would likely further damage its already “junk”-rated credit profile. The company has also expressed concern over Paramount’s negative free cash flow, which it believes would deteriorate further if the acquisition were completed.

In October, Warner Bros. Discovery disclosed that it was evaluating strategic alternatives, including a potential sale, after receiving unsolicited interest from multiple bidders. At the time, the company was valued at more than $45 billion but was weighed down by substantial debt. WBD has faced ongoing challenges from shrinking cable television audiences and escalating competition in the streaming market, particularly from Netflix. Shortly after announcing its strategic review, Netflix emerged as the preferred bidder following a competitive process that included Paramount and Comcast.