Netflix is reportedly weighing a tactical pivot in its bid for Warner Bros. Discovery's studio and streaming assets: taking the offer all-cash. The move, first reported by Bloomberg, is a direct response to a hostile takeover attempt from Paramount.
Cash is king: Netflix's original cash-and-stock offer is being challenged by Paramount's $30-per-share bid for the entire company, which the rival bidder has pitched as a simpler and more valuable proposition. A switch to all-cash would strip Paramount of a key argument it has used to attack the Netflix deal.
The gloves are off: The battle for WBD has already turned litigious, with Paramount suing the Warner Bros. Discovery board and threatening a proxy fight to scuttle the acquisition. WBD's board is holding firm, calling Paramount's efforts "meritless" and advising shareholders to stick with the Netflix agreement.
Why this matters: This potential change in terms is a clear reaction to both Paramount's aggressive campaign and recent stock market volatility. With Netflix's share price dropping since the deal was announced, a switch to all-cash would remove a major point of uncertainty for WBD shareholders tied to the deal's original stock 'collar' provision.
Meanwhile, the fight for WBD is getting more complex, with Paramount detailing its lawsuit against the WBD board and major shareholders publicly disagreeing on which offer is superior.
