Netflix has increased its bid for media behemoth Warner Bros Discovery (WBD) in response to a hostile takeover attempt by entertainment conglomerate Paramount. The streaming giant is now offering cash, in addition to Netflix shares, to enhance the appeal of its offer.
The overall value of the deal remains at $82.7 billion (£61.4 billion), but shareholders will now receive cash instead of partial ownership in Netflix. Each WBD shareholder will still receive $27.75 (£20.63) per WBD share. While Netflix’s offer is valued at $72 billion (£53.50 billion) based on the share price, the deal values the assets at $82.7 billion.
This revised offer aims to simplify the acquisition process, provide greater certainty of value for WBD stockholders, and expedite the timeline for shareholders to vote on Netflix’s proposal. This move clarifies what each stockholder can expect upon the completion of the transaction, especially given the fluctuation in Netflix’s share price following the merger announcement. A shareholder vote is anticipated to take place by April.
In contrast, Paramount, which initiated the hostile takeover bid for WBD, circumvented the WBD board and directly approached shareholders with an offer of $30 (£22.30) in cash per share. The WBD board unanimously recommended shareholders to accept Netflix’s offer for the streaming segment of WBD’s business, while rejecting the Paramount Skydance offer. However, any agreement, even if approved by shareholders, is contingent on regulatory approval.
A potential merger between WBD and either Paramount Skydance or Netflix would mark one of the most significant media deals in history, with far-reaching implications for television, filmmaking, and the future of cinema. Netflix’s skepticism about the future of movie theaters, demonstrated by its short theatrical releases and direct-to-streaming films, hints at potential changes in the theatrical distribution model for WBD’s film production entities under Netflix’s ownership.
If Paramount Skydance successfully acquires WBD, it would gain control of CNN and CBS News, raising concerns about the consolidation of news services within a limited number of companies associated with allies of former US President Donald Trump. Paramount Skydance’s chairman and CEO, David Ellison, is the son of billionaire Larry Ellison, a prominent Trump ally.
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