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Netflix Now available for purchase warner bros.. Discovery’s studio and streaming businesses are paid in cash – earned with effort Hollywood Giant shareholders pursue $72 billion merger and could thwart hostile bid by Skydance-owned companies Paramount.
As early as December last year, Netflix reached a cash and stock deal with Warner for $27.75 per share, bringing its total enterprise value to $82.7 billion (including debt). But on Tuesday, the companies announced they would amend the deal to simplify its structure, provide Warner shareholders with more certainty of value and speed up the process for a shareholder vote – which they said could be completed in April.
The all-cash transaction is still valued at $27.75 per Warner share. Warner shareholders will also receive additional value in shares of Discovery Global, which will become an independent publicly traded company following the previously announced separation from Warner Bros.
Warner leadership has repeatedly supported a merger with Netflix, and the boards of both companies approved the all-cash deal announced Tuesday. Warner CEO David Zaslav said in a statement that the revised agreement “brings us closer to uniting two of the greatest storytelling companies in the world.”
A Paramount spokesman declined to comment when contacted by The Associated Press on Tuesday. Unlike Netflix, Paramount wants to acquire Warner’s entire company – including networks like CNN and Discovery – and provided all cash directly to shareholders in a $77.9 billion offer last month.
Warner shareholders have until 5 p.m. ET on Wednesday to tender their shares in support of Paramount’s bid, which has an enterprise value, including debt, of $108 billion. But that deadline could be pushed back further. Although Paramount declined to reveal more details on Tuesday, The Wall Street Journal reported last week that the studio was planning another extension.
In addition to the tender offer, Paramount has committed to a representation fight. Last week, the company said it would nominate its own directors before Warner’s next shareholder meeting, but a date for the meeting has not yet been set.
Paramount also filed suit in Delaware Chancery Court seeking to force Warner Bros. to disclose to shareholders how it evaluated its bid and Netflix’s competing offer. But a judge on Thursday rejected Paramount’s request to speed up the proceedings.
In a statement at the time, Warner applauded the court’s decision and called Paramount’s lawsuit “another half-hearted attempt at distraction.” Paramount, meanwhile, insisted the ruling was irrelevant to the substance of its allegations and said Warner shareholders “should ask why their board worked so hard to hide this information.”
Regardless of who ultimately prevails, the sale of Warner Bros. Discovery Channel is likely to be a long, drawn-out process that will almost certainly draw huge antitrust scrutiny. On Tuesday, Netflix and Warner insisted they expected to complete the merger within 12 to 18 months after reaching a deal in December.
Still, a hostile takeover by Paramount could complicate that timeline. Politics are also expected to play a role under the president Donald TrumpHe made an unprecedented suggestion as to whether the deal would go through with his personal involvement.
Trade groups in the media and entertainment industry have sounded the alarm over both bids, warning that further consolidation in the industry could lead to job losses and less diversity in content, which would have a particularly negative impact on film production.
The companies have spoken out about these concerns. On Tuesday, Netflix co-CEO Ted Sarandos said a merger with Warner “will provide broader choice and greater value to audiences around the world” both domestically and in theaters, while “fueling job creation and long-term industry growth.”
Shares of Netflix were up less than 1% on Tuesday morning, while shares of Warner Bros. Discovery and Paramount Skydance were down slightly.