In the latest twist in a saga that will likely overshadow Hollywood for a significant portion of 2026, Netflix is reportedly considering switching its offer to an all-cash bid for the Warner Bros streaming and studios business.
Netflix declined to comment on Tuesday (January 13) on what would be a significant shift from its initial cash and stock offer, which is valued at $27.75 per Warner Bros Discovery (WBD) share and has been agreed upon by the boards of WBD and Netflix – subject to WBD shareholder and regulatory approval and customary closing conditions.
The streamer’s reported move comes one day after Paramount filed a lawsuit against WBD seeking more information on Netflix’s offer. Paramount CEO David Ellison is also gearing up for a proxy war to persuade shareholders to elect a new slate of directors to the WBD board who would approve his hostile bid of $30 per share for the entirety of WBD.
The Paramount CEO has been rebuffed several times by WBD, which has argued his offer is inferior to the Netflix bid and relies on a hefty amount of debt financing that creates uncertainty over a deal resolution. The bid has a $40bn equity backing from Ellison’s centibillionaire father and Oracle co-founder Larry Ellison, and is additionally supported by a trio of Arab state sovereign funds.
Netflix stock climbed by 1% to $92.03 on Tuesday. The share price has tumbled 29% in the last six months and observers noted investors in the streamer may be concerned over the stock component of its bid, which comprises $23.25 in cash and $4.50 worth of Netflix stock and carries an enterprise value of $82.7bn.
An analysis published last week by Paramount, whose bid carries an enterprise value of $108.4bn, asserted that the drop in share price has devalued Netflix’s offer.
On the face of it, an all-cash bid promises a smoother path to resolution in mergers and acquisitions – as Paramount has argued. However it can also trigger an escalation in a bidding war that may not deter Netflix, given its strong balance sheet and cash flow.
Paramount has not raised its offer since it approached shareholders directly with its hostile takeover offer in December.
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