Netflix has switched its agreement for Warner Bros. Discovery to an all-cash deal. The new offer still values Warners at $27.75 per share, but it removes the $4.50 Netflix stock element, which was part of the earthshaking agreement revealed last December.
Discovery Global, the parent of cable networks CNN, TNT, Food Network and many others, is not part of Netflix’s proposal. Prior to the M&A action, WBD had said it intends to split into two companies this year. Under the Netflix plan, the split would still happen within the next six to nine months, prior to Netflix taking over the studio and streaming side of the media giant.
Bloomberg reported last week that Netflix was looking to switch its proposal to all-cash.
Paramount Skydance, meanwhile, has made a hostile bid for all of Warner Bros. Discovery, including the cable networks. The Larry Ellison-backed media company said last week it plans to mount a proxy fight in order to prevail in the M&A tug of war. Paramount has also sued WBD in Delaware Chancery Court, aiming to compel WBD to disclose more data about its dealmaking process.
Both Netflix and Warner Bros. Discovery said the agreement “provides enhanced certainty” to WBD shareholders by “eliminating market-based variability.” The new agreement, still worth the previous $82.7 billion, would also likely led to a faster pathway to a shareholder vote on the transaction, which is projected to happen by April 2026.
The agreement also heaps the pressure back on the other WBD suitor, Paramount, which has been lobbying to get the Netflix deal quashed and allow for its own offer of $30 per share to be taken forward. Paramount’s offer factors in the Discovery portion of the business, which Netflix is not buying.
The amended, all-cash transaction was unanimously approved by the boards of directors of both Netflix and WBD, and remains subject to completion of the Discovery Global spinoff, regulatory approvals, approval of WBD stockholders and other closing conditions. President Donald Trump has signaled both support and distrust for the deal, but his say will play a major factor in the deal going through.
WBD today gave a price to the spinoff Discovery Global after advisors applied three different metrics. The first values the company at a low of $1.33 per share and a high of $3.24. Should Discovery Global become involved in a “potential future transaction,” this could rise to as much as $6.86, per a proxy filing made in the past few hours.
“Today’s revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world and with it even more people enjoying the entertainment they love to watch the most,” said David Zaslav, President and CEO of WBD.
“By coming together with Netflix, we will combine the stories Warner Bros. has told that have captured the world’s attention for more than a century and ensure audiences continue to enjoy them for generations to come.”
“The WBD Board continues to support and unanimously recommend our transaction, and we are confident that it will deliver the best outcome for stockholders, consumers, creators and the broader entertainment community,” said Ted Sarandos, co-CEO of Netflix.
“Our revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty at $27.75 per share in cash, plus the value from the planned separation of Discovery Global. Together, Netflix and Warner Bros. will deliver broader choice and greater value to audiences worldwide, enhancing access to world-class television and film both at home and in theaters. The acquisition will also significantly expand U.S. production capacity and investment in original programming, driving job creation and long-term industry growth.”
Netflix is set to report fourth-quarter earnings Tuesday afternoon. Shares in the streaming giant perked up 1% in pre-market trading.
