Even a $40 billion personal guarantee wasn’t enough to sway Warner Bros Discovery, as the company leans towards Netflix’s cash offer. Netflix is reportedly restructuring its $83 billion acquisition to an all-cash deal, aiming to beat the hostile bid from Paramount Skydance, despite the massive backing from Larry Ellison.
Paramount’s total offer is $108.4 billion, supported by Ellison’s guarantee. However, WBD’s board has rejected it due to the high debt levels involved. Paramount is now trying to replace the board to force the sale. Netflix’s cash offer is seen as the safer, more reliable option.
The revised deal targets WBD’s studio and streaming assets, including HBO and Warner Bros Pictures. WBD’s linear networks, like CNN and Discovery, are not included. This all-cash structure offers immediate value without the risks associated with the Paramount bid.
The deal has drawn criticism from US politicians who fear a monopoly. Critics argue that the combined company would control nearly half of the streaming market. This political backlash is a significant hurdle, but Netflix is banking on the financial logic of the deal.
The market seems to agree with the board’s assessment. WBD shares rose 1.6% on the news, suggesting that investors value the certainty of Netflix’s cash over the Ellison guarantee. The situation proves that in corporate takeovers, structure matters as much as size.