Netflix strengthens its Warner Bros. bid as Paramount's David Ellison tries to wreck its deal

"Netflix is breaking open its piggy bank to keep Paramount Skydance CEO David Ellison from crashing its Warner Bros. deal. The streaming giant just sweetened its offer for the Warner Bros. studio and HBO by offering all-cash, matching a key feature of Paramount's hostile bid. "Our revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty," Netflix co-CEO Ted Sarandos said in a statement announcing the news."

"While Netflix isn't raising its bid from $27.75 per share, converting $4.50 per share in stock to cash takes away a variable for Warner Bros. Discovery shareholders. Netflix shares are down 13% since the Warner Bros. deal was made public and have fallen 28% since late October. Paramount believes its all-cash offer of $30 per share for all of WBD is superior to Netflix's winning bid for WBD's key assets, which include its studio, HBO, and HBO Max, but not its TV networks."

"Ellison has made eight bids for WBD, all of which have been rejected. Paramount is now suing WBD while fighting for spots on its board. A key remaining point of difference between the two bids hinges on the perceived value of WBD's networks. Paramount is looking to buy them, while Netflix is not. If WBD's cable channels, such as CNN, TNT, and HGTV, are valued at less than $2.25 per share,"

Netflix converted $4.50 per share of its $27.75 Warner Bros. offer from stock to cash, making the proposal fully cash to expedite a shareholder vote and reduce financial uncertainty. The company kept the per-share price unchanged while removing exposure to Netflix's falling stock. Paramount has made eight rejected bids and now offers $30 per share in cash for all of WBD, including its TV networks, and is suing WBD while seeking board seats. The remaining dispute centers on valuation of WBD's cable channels; if those networks are worth under $2.25 per share, Paramount's bid appears preferable, though breakup fees and transition costs alter the comparison.

Read at Business Insider