Netflix agrees revised all-cash deal for Warner Bros studios

Netflix has significantly increased its all-cash offer to acquire Warner Bros Discovery’s studio and streaming business, intensifying an ongoing takeover battle with rival Paramount Skydance.

The revised bid aims to secure Warner Bros’ extensive film and television library, alongside its premium HBO Max streaming service, in a move that could reshape the entertainment landscape.

In December, Netflix agreed to pay $23.25 in cash, $4.50 (£3.35) worth of Netflix stock per share to buy Warner Bros assets.

The deal valued the business at around $82.7bn (£61.5 bn). However, shares in Netflix have dropped by almost 15 per cent since the deal was first announced.

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The US-based streaming giant has said it will now offer $27.75 (£20.64) per share in cash to buy the business, which will include Warner Bros’ extensive library of film and TV rights, as well as its HBO Max streaming service.

Analysts have said the new terms are favourable for investors in Warner Bros Discovery.

Despite the improved financial terms, Warner Bros Discovery continues to back Netflix over a competing bid from Paramount Skydance.

The rival studios and media giant had put forward an offer of $30 per share in cash, but crucially, this was for the entire Warner Bros Discovery company, rather than just its studio and streaming divisions, highlighting a key difference in the acquisition strategies.

David Zaslav, president and chief executive of Warner Bros Discovery, expressed his enthusiasm for the impending merger.

He stated: "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. 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."

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Greg Peters, Netflix’s co-chief executive, underscored the strategic and financial benefits of the amended agreement.

He commented: "By amending our agreement today, we are underscoring what we have believed all along: not only does our transaction provide superior stockholder value, it is also fundamentally pro-consumer, pro-innovation, pro-creator and pro-growth. Our revised all-cash agreement demonstrates our commitment to the transaction with Warner Bros and provides WBD stockholders with an accelerated process and the financial certainty of cash consideration, while maintaining our commitment to a healthy balance sheet and our solid investment grade ratings."

The agreed deal is contingent on Warner Bros Discovery completing a proposed spin-off of its cable channels, which include CNN, TBS, and TNT Sports in the UK.