Netflix weighs amending Warner Bros bid to make it all cash

Netflix shares have lost about a quarter of their value since the company’s pursuit of Warner Bros started

NETFLIX is working on revised terms for its Warner Bros Discovery acquisition and has discussed making an all-cash offer for the company’s studios and streaming businesses, people familiar with the discussions said.

The changes are designed to expedite a sale that will take months to close and has faced opposition both from politicians and rival bidder Paramount Skydance Corp. Institutional investors have been divided in their support.

Under the original agreement, Warner Bros shareholders were to receive US$23.25 in cash and US$4.50 in Netflix common stock, with certain adjustments in place if shares of the streaming giant fall below US$97.91.

Since the company’s pursuit of Warner Bros began in October, Netflix shares have lost about a quarter of their value. They traded as low as US$89.07 on Tuesday in New York.

After choosing Netflix in early December, Warner Bros has faced repeated efforts by Paramount to scuttle that deal and accept its offer.

Paramount chief executive officer David Ellison and his father, Oracle co-founder Larry Ellison, have launched a tender offer for Warner shares, extended a personal guarantee to US$40.4 billion of funding and sued Warner Bros for more details about their valuation of the Netflix transaction.

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

They also plan to nominate directors to the board to thwart the deal.

Shares of Warner Bros rose as much as 3.9 per cent following the news of Netflix’s deliberations. Shares of Netflix rose as much as 2 per cent. BLOOMBERG

Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.