Netflix Revises Bid for Warner Bros. Discovery with All-Cash Offer

In a significant shift, Netflix has amended its acquisition proposal for a key segment of Warner Bros. Discovery (WBD), moving to an entirely cash-based offer. The streaming giant now proposes to pay $27.75 per share in cash for WBD's "Warner Bros. Streaming & Studios" division, abandoning a previous structure that included a mix of cash and Netflix stock. The WBD board of directors has unanimously endorsed the revised agreement, and the company's shares are currently trading above the offer price.

This revision comes amid heightened takeover competition. Paramount Skydance had previously tabled an unsolicited bid of $30.00 per share in cash for the entire Warner Bros. Discovery conglomerate, including both its studios and linear television networks. The WBD board rejected that offer, asserting that the combined value of Netflix's $27.75 cash component plus the equity in a soon-to-be-spun-off entity for the linear TV assets exceeds Paramount Skydance's blanket proposal.

Netflix's shift to a pure cash transaction is designed to provide WBD shareholders with immediate liquidity and certainty, removing any exposure to fluctuations in Netflix's share price before the deal closes. WBD CEO David Zaslav characterized the move as a step toward uniting "two great storytelling companies" while delivering a clearly defined premium for equity holders.

Transaction Structure and Market Valuation

The complex transaction is structured in two parts. Shareholders of Warner Bros. Discovery are set to receive:
* $27.75 per share in cash from Netflix.
* Shares in "Discovery Global," a new, independent company that will house the linear TV networks, including CNN, TNT Sports, and the Discovery Channel.

The enterprise value for the streaming and studio division involved in this deal is approximately $82.7 billion. The spin-off of Discovery Global is expected to assume around $17.0 billion in net financial liabilities, while retaining the stable revenue streams from the legacy TV business.

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Market Response and Sector Consolidation

Financial markets have reacted favorably to the new terms. WBD stock is holding firm above the cash offer, trading at around $28.58, showing a slight daily gain. Netflix shares also advanced by about 1.2%, as the all-cash structure avoids immediate dilution for its shareholders despite the increased cash requirement.

This potential deal is part of a broader wave of media and streaming sector consolidation that began in late 2025. Netflix's strategy hinges on a separation model, aiming to combine high-growth streaming and valuable intellectual property rights—such as HBO, DC Studios, and Warner Bros. Pictures—under its roof, while divesting the more mature linear TV operations. In contrast, Paramount Skydance's approach favors maintaining the conglomerate structure.

For Netflix, securing access to the Warner library, with franchises like "Harry Potter," "Game of Thrones," and DC Comics, would significantly bolster its competitive position against rivals like Disney and Amazon.

Path Forward and Key Considerations

Attention now turns to shareholder approval and regulatory scrutiny. The critical next steps include:
* Shareholder Vote: Warner Bros. Discovery intends to call a special shareholder meeting to vote on the transaction by April 2026.
* Regulatory Hurdles: While the spin-off of linear assets may alleviate some antitrust concerns, regulators in the U.S. and EU are expected to closely examine the combination of two major streaming content libraries.
* Market Signals: WBD stock is consolidating near its 52-week high around $30.00. A sustained move significantly above $30 could indicate market anticipation of a potential counterbid. Trading above $27.75 reflects the floor value underpinned by Netflix's guaranteed cash payment.

The ultimate valuation of the deal remains partially contingent on the future market capitalization of Discovery Global. Detailed information on its planned capital structure and segment outlook is anticipated in upcoming proxy filings.