Netflix’s Strategic Shift: An All-Cash Bid Intensifies the Battle for Warner Bros. Discovery

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In a bold tactical move, Netflix is reportedly restructuring its multi-billion dollar acquisition proposal for Warner Bros. Discovery, escalating one of Hollywood's most significant corporate contests. The streaming giant is shifting from a mixed cash-and-stock offer to a purely cash transaction. This strategic pivot aims to accelerate the deal's closure and outmaneuver its rival bidder, Paramount Skydance.

According to corroborating reports from CNBC and Reuters, Netflix intends to convert the transaction, initially agreed upon in December 2025, into an all-cash proposal. The original agreement valued Warner Bros. Discovery at $27.75 per share, representing an enterprise value of approximately $82.7 billion, with an equity value of $72.0 billion.

The initial structure would have provided Warner Bros. shareholders with $23.25 in cash and $4.50 in Netflix common stock per share. The revised, fully cash-based offer is designed to significantly shorten the shareholder approval process:
- Previous Timeline: A vote was anticipated in spring or early summer.
- Revised Timeline: A vote could now occur as early as late February or early March.
- Key Driver: Pure cash transactions require less extensive financial documentation and regulatory filings.

This acceleration increases pressure on the process before competing offers can gain further traction.

Paramount Skydance Raises the Stakes

Netflix's move to an all-cash deal comes as Paramount Skydance aggressively advances its own hostile bid for Warner Bros. Discovery. Paramount's offer stands at $30 per share for the entire company, including its television networks, valuing the potential deal at $108.4 billion.

Paramount's aggressive tactics include:
- Filing a lawsuit against Warner Bros. Discovery and its CEO, David Zaslav.
- Securing a $40.4 billion equity commitment from Oracle co-founder Larry Ellison.
- Plans to nominate its own candidates to the Warner Bros. board of directors.
- Preparing a public tender offer to be made directly to Warner Bros. Discovery shareholders.

To date, the Warner Bros. Discovery board has consistently endorsed the Netflix proposal, citing concerns that Paramount's bid is heavily reliant on debt financing, which carries higher execution risk.

Share Price Under Pressure from M&A Concerns

Netflix shares declined by 2% yesterday following a price target reduction by TD Cowen from $142.00 to $115.00. During the trading session, the stock fell to $87.95 before closing at $88.55. Since the Warner Bros. Discovery offer was first announced in October, the stock has lost roughly 25% of its value.

Key Financial Metrics

• Market Capitalization: Approximately $375 billion
• 50-Day Moving Average: $100.26
• 200-Day Moving Average: $113.71
• 52-Week Range: $82.11 – $134.12

The current share price sits decisively below both its 50-day and 200-day moving averages—a technical picture indicative of an established downward trend.

Potential EPS Dilution from Cash Financing

Market analysts highlight that the all-cash structure could pressure Netflix's earnings per share (EPS) for the 2026 fiscal year. This concern stems from the increased financing requirement. Netflix has already secured $59 billion in loan commitments from major banks and plans to refinance approximately $25 billion into longer-term debt.

As of the end of September 2025, Netflix's net debt-to-EBITDA ratio was under 1.0. The company held $9.3 billion in cash against total debt of $14.5 billion. Analysts at Bloomberg Intelligence note that Netflix retains additional capacity for further borrowing without jeopardizing its robust credit ratings.

Upcoming Q4 Earnings as the Next Catalyst

Netflix is scheduled to report its fourth-quarter 2025 results on January 20. Morningstar analysts maintain a fair value estimate of $770 per share for the company, significantly above current trading levels. The research firm projects average annual revenue growth of around 10% over the next five years, anticipating substantially expanding margins, particularly as its international markets mature.

Successfully acquiring Warner Bros. Discovery would grant Netflix control over some of the entertainment industry's most valuable intellectual property, including the Harry Potter franchise, Game of Thrones, the DC Comics universe, and classic films like Casablanca. Such a content portfolio could meaningfully alter the competitive dynamics of the global streaming market for years to come.