Netflix’s All-Cash Bid Accelerates Warner Bros. Discovery Takeover Race

Warner Bros. Discovery (A) US9344231041

The contest for control of Warner Bros. Discovery (WBD) is intensifying, with Netflix revising its acquisition strategy to present a clearer, more definitive offer. The streaming giant has shifted from a mixed cash-and-stock proposal to a straightforward all-cash bid, a move that significantly alters the valuation dynamics, timeline, and competitive landscape. The central question for shareholders now revolves around which suitor can deliver the more certain and reliable outcome.

In a decisive strategic pivot, Netflix has amended its agreement to acquire Warner Bros. Discovery, converting the deal into a pure cash transaction. While the offer price remains steady at $27.75 per share, the structural change is critical. By eliminating a stock-based component, the proposal provides investors with a fixed and predictable value, removing exposure to future share price volatility.

This revised offer has received the unanimous backing of the WBD board of directors. Their endorsement paves the way for a more streamlined and expedited shareholder vote. The company has already filed preliminary proxy materials with the U.S. Securities and Exchange Commission (SEC), aiming to complete the shareholder approval process for the transaction by April 2026.

Integral to the arrangement is the planned spin-off of Discovery Global from the combined corporate entity. This element transforms the transaction from a simple acquisition into a comprehensive corporate restructuring.

Key details of the revised bid include:
* An all-cash offer from Netflix valued at $27.75 per WBD share
* Unanimous support from the WBD board of directors
* An accelerated timeline targeting a shareholder vote by April 2026
* The planned separation of Discovery Global

Paramount's Rival Bid Faces Significant Headwinds

While Netflix advances its plans, competing bidder Paramount finds itself at a distinct disadvantage. Although Paramount extended its own all-cash offer of $30 per share—a nominally higher price—the proposal has garnered little traction.

The WBD board has repeatedly and unanimously rejected Paramount's overture, characterizing it as an "inferior construct." Financing concerns are central to this assessment. The Paramount bid relies heavily on debt financing, a structure that the WBD leadership views as introducing additional risk and uncertainty.

The market has delivered a stark verdict as well. To date, over 93% of tendered shares have rejected the Paramount offer. This signals that both institutional and private investors place greater confidence in the Netflix proposal's execution certainty and structural soundness, even at a lower nominal price per share.

Market Sentiment Consolidates Behind Netflix

Current trading activity reflects the market's assessment of the evolving situation. WBD shares recently closed at €23.81, trading notably below the value of Netflix's cash offer. Following a substantial twelve-month surge of approximately 138% and exhibiting significant short-term volatility—around 73% on a 30-day basis—the stock remains speculative. Its current trajectory, however, is now firmly shadowed by the takeover developments.

For investors, the structure of the deal carries more weight than daily price fluctuations. Netflix's fully financed cash transaction, backed by existing liquidity, credit facilities, and committed debt financing, substantially increases what is known as "execution certainty." This refers to the heightened probability that the merger will be successfully completed.

The shift to an all-cash bid and the establishment of a clear voting schedule have brought a union of the two media companies markedly closer. The coming weeks, leading up to the anticipated shareholder meeting, will set the stage for a final decision. This period will encompass regulatory reviews and final negotiations concerning the details of the Discovery Global separation.