Netflix has officially pivoted to an all-cash offer to acquire Warner Bros. Discovery (WBD), aiming to finalize the $82.7 billion deal and neutralize a aggressive counter-bid from Paramount. The streaming giant is maintaining its price point of $27.75 per share, but has replaced the previous cash-and-stock structure with a simplified, all-cash transaction.
Simplifying the Acquisition Strategy
In a formal statement released Tuesday, the companies confirmed that the revised agreement is designed to provide shareholders with greater certainty of value while accelerating the timeline for a final vote. Netflix intends to fund the massive acquisition through a combination of existing cash, debt, and committed financing.
The Paramount Challenge
The move comes as Paramount—backed by the financial muscle of Oracle co-founder Larry Ellison—has ramped up pressure on WBD shareholders. Paramount’s competing offer sits at $30 per share, supported by a $40 billion guarantee from CEO David Ellison’s father.
Paramount’s pursuit of WBD has been marked by hostility. Last week, the company filed a lawsuit seeking deeper transparency regarding the Netflix deal and announced plans to nominate its own slate of directors to the WBD board. While the court initially blocked Paramount’s request to expedite the lawsuit, the competitive tension remains at an all-time high.
Why WBD Favors Netflix
Despite Paramount’s higher per-share bid, WBD’s board has remained steadfast in its support for Netflix. Executives have publicly criticized the Paramount offer, citing “materially more risk.” WBD argues that a merger with Paramount would saddle the combined entity with $87 billion in debt, potentially devastating the company’s financial health.
Beyond the debt load, WBD has raised significant concerns regarding Paramount’s operational viability post-acquisition. The board pointed to Paramount’s current “junk” credit rating and negative free cash flow as critical indicators that the deal would be unsustainable.
Market Context
The acquisition saga began last October when WBD first explored a sale following unsolicited interest from several major players. At the time, WBD faced a valuation of roughly $45 billion, crippled by massive debt and a steady decline in cable viewership. After a fierce bidding war involving Comcast and Paramount, Netflix emerged as the preferred suitor, a position it is now fighting to solidify with this all-cash adjustment.