Netflix is preparing an all-cash offer for Warner Bros Discovery’s studios and streaming assets, according to a report from Reuters.
The sale process is expected to take months and faces political opposition and competing bids, notably from Paramount Skydance.
The big picture: Netflix’s bid for Warner Bros’ film and streaming assets was initially $82.7 billion in cash and stock; Paramount’s offer is $108.4 billion in cash for the whole company, including its cable TV business.
- Warner Bros reportedly prefers Netflix’s deal, despite Paramount’s amended bid, which now includes $40 billion equity backing from Larry Ellison and David Ellison.
- Warner Bros’ board considers Paramount’s offer to rely on too much debt financing and views it as “inadequate.”
Go deeper: Paramount and Netflix are vying for Warner Bros, which owns major franchises like “Harry Potter,” “Game of Thrones,” “Friends,” the DC Comics universe, and classic films such as “Casablanca” and “Citizen Kane.”
- Netflix has agreed to a $5.8 billion termination fee if the deal is blocked by regulators, while Warner Bros would owe $2.8 billion if it backs out.
- The acquisition fight has become the most-watched Hollywood takeover battle, reflecting the industry’s shift to streaming and the volatility of theatrical revenues.
- Paramount has taken legal action against Warner Bros, seeking more details about the Netflix deal and announcing plans to nominate new board directors.
- Paramount claims its all-cash bid of $30 per share for all of Warner Bros is superior to Netflix’s previous offer of $27.75 per share for only the studios and streaming assets.
