In the face of determined moves from Paramount Skydance, and possibly as a result of shareholder murmurs, Netflix has switched up its proposed deal with Warner Bros. Discovery.
The deal will now be all cash, matching the Paramount method of offer, rather than one made up of cash and Netflix stock.
This will value the streaming and studio component of WBD at $27.75 per share. No change from December’s value position.
The plan indicates a completion within 6 to 9 months, once the regulatory hurdles are cleared.
Netflix and WBD have made this move, as they say, to provide shareholders with “enhanced certainty”. The price will be fixed, so market movements in Netflix share price will no longer affect the valuation and payout.
Netflix’s share price has dropped by around 12% since the deal was announced, which is normal for companies in the throes of a big acquisition.
It did, however, provide a chink in the armor of the deal that the Ellison-led bid from Paramount Skydance would no doubt have exploited.
A report in The Wrap says that President and CEO of Warner Bros. Discovery David Zaslav will earn $500 million from the deal.
We eagerly await Netflix’s offer for Last Movie Outpost, as I quite fancy a sandwich.
He issued a statement saying:
“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.”
The shareholder vote remains set for April.
