Netflix revises offer for Warner Bros Discovery to all cash

Netflix has revised its offer for Warner Bros. and HBO to all cash, Warner Bros. Discovery and Netflix announced Tuesday.Initially, Netflix had offered to buy the two entities with a mix of cash and stock, CNN reported.
WBD and Netflix are hoping that the revised offer will be enough to prevent Paramount’s hostile takeover bid for all of WBD.
Netflix is offering $27.75 per WBD share for the company’s movie studio and streaming assets, which will split off into a new publicly traded company called Warner Bros. later this year. Meanwhile, CNN and other channels owned by WBD will become part of a separate company called Discovery Global.
Previously, Netflix offered $23.25 per share in cash and the rest in Netflix stock, which allowed Paramount to argue that its all-cash offer was better.
Netflix on Tuesday said the transaction will be financed “through a combination of cash on hand, available credit facilities and committed financing.”
This “simplifies the transaction structure, provides greater certainty of value for WBD stockholders, and accelerates the path to a WBD stockholder vote,” Netflix and WBD said.
WBD CEO David Zaslav said Tuesday that after the company is reviewed by the U.S. Securities and Exchange Commission, WBD will schedule a special shareholder meeting to vote on the deal, which he expects to happen in the spring.
Paramount had anticipated the all-cash revised offer and has been moving forward with its plan to buy up shares for $30 each. Paramount CEO David Ellison also threatened a proxy fight earlier this month, vowing to nominate a Paramount-friendly slate of board members to take over the WBD Board.
WBD has argued that the Netflix deal, in addition to the formation of Discovery Global, is better for investors.
WBD Board of Directors Chairman Samuel A. Di Piazza, Jr., said Tuesday morning, “By transitioning to all-cash consideration, we can now deliver the incredible value of our combination with Netflix at even greater levels of certainty, while providing our stockholders the opportunity to participate in management’s strategic plans to realize the value of Discovery Global’s iconic brands and global reach.”
Paramount, meanwhile, has argued that the channels have little to no equity value.
Paramount filed a lawsuit in Delaware earlier this month to obtain more information about the valuation “so that WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer,” Ellison said.

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