Netflix has raised the stakes in one of the most closely watched corporate battles in the global entertainment industry, announcing that it is now prepared to pay entirely in cash for key parts of Warner Bros. Discovery (WBD).
The revised offer, unveiled on Tuesday, replaces an earlier mix of cash and stock and is widely seen as an attempt to blunt a hostile takeover bid from rival Paramount, reported CNN.
The amended proposal comes barely six weeks after Netflix and WBD first revealed their sweeping deal, a transaction that could redraw the balance of power in Hollywood by combining Netflix’s streaming dominance with Warner Bros.’ storied film studio and the HBO brand.
Under the new terms, Netflix will offer $27.75 per WBD share for the company’s movie studio and streaming assets, which are set to be carved out into a new, publicly listed company to be called Warner Bros. later this year. WBD’s news channels, including CNN, will be housed separately in a new entity named Discovery Global.
Why Netflix Changed Its Offer
Netflix had initially proposed a blended package: $23.25 per share in cash, with the balance paid in Netflix stock. That structure opened the door for Paramount to argue that its own all-cash proposal was superior, giving shareholders greater certainty on value and liquidity.
The shift to an all-cash bid is designed to close that gap.
“This simplifies the transaction structure, provides greater certainty of value for WBD stockholders, and accelerates the path to a WBD stockholder vote,” the two companies said in a joint statement.
Netflix said the deal would be funded “through a combination of cash on hand, available credit facilities and committed financing,” signalling that it is prepared to stretch its balance sheet to secure assets it views as strategically critical.
A Deal Meant to Block Paramount
At the heart of the revision is a fierce three-way contest. Paramount has been pursuing a hostile takeover of all of WBD, offering $30 per share and moving aggressively to buy stock in the open market. Earlier this month, Paramount chief executive David Ellison went a step further, threatening a proxy fight and pledging to nominate a Paramount-friendly slate of directors to seize control of the WBD board.
WBD has repeatedly rejected Paramount’s advances, arguing that the Netflix transaction, combined with the creation of Discovery Global, delivers a better outcome for shareholders.
Samuel A. Di Piazza, Jr., chair of the WBD board, said on Tuesday, “By transitioning to all-cash consideration, we can now deliver the incredible value of our combination with Netflix at even greater levels of certainty, while providing our stockholders the opportunity to participate in management’s strategic plans to realise the value of Discovery Global’s iconic brands and global reach.”
Paramount, however, has pushed back hard, arguing that WBD’s cable channels have little to no equity value and that the Netflix deal undervalues the business.
The Legal and Regulatory Clock
The battle is now moving into a decisive phase. WBD chief executive David Zaslav said the company will call a special shareholder meeting to vote on the deal once it clears its review by the US Securities and Exchange Commission. He expects that vote to take place in the spring.
Paramount has already taken the fight to court. Earlier this month, it filed a lawsuit in Delaware seeking access to more valuation information. Ellison said the aim was to ensure “WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer.”
The court, however, rejected Paramount’s attempt to fast-track the case, dealing an early procedural setback to its campaign.
What Each Side Wants
For Netflix, the logic is straightforward. Acquiring Warner Bros. and HBO would give it control of one of the deepest film and television libraries in the world, strengthening its position in a fiercely competitive streaming market that is already showing signs of subscriber fatigue and margin pressure.
For WBD’s leadership, the split offers a way to simplify a complex conglomerate structure, unlock value, and keep control out of Paramount’s hands.
For Paramount, the goal is to seize a rare opportunity to bulk up through acquisition, even if that means forcing the issue through a shareholder revolt.
The coming months will be critical. WBD shareholders will be asked to weigh three competing narratives: Netflix’s promise of certainty through cash, Paramount’s claim of superior value, and management’s vision for Discovery Global as a standalone player.
The outcome will shape not only the fate of Warner Bros. and HBO, but also the future structure of the global entertainment industry.