The Battle for Warner Bros.: Netflix Secures $25 Billion War Chest

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As the holiday season unfolds, the corporate arena is witnessing a high-stakes showdown. Netflix has fortified its position in the pursuit of Warner Bros. Discovery (WBD), confirming a massive $25 billion financing package. This move intensifies its bidding war against Paramount Global. In thin pre-market trading on Christmas Eve, Netflix shares held steady at $93.50.

The contest for the media giant has escalated sharply. Netflix, which earlier this month tabled an offer valuing WBD at approximately $82.7 billion, has now locked in a substantial new financial facility. The $25 billion package comprises bridge financing and a fresh revolving credit line, designed to secure the cash portion of its bid and assuage concerns over transaction certainty.

This is a direct counter to the hostile, all-cash rival bid from Paramount Global. Backed by the financial heft of Larry Ellison, Paramount is offering $30 per WBD share, implying an enterprise value of roughly $108.4 billion. While nominally higher, Netflix's confirmed financing signals to the WBD board that it possesses the ready capital for a swift completion upon approval.

Market reaction has been muted thus far. Netflix equity has retreated significantly from its June 2025 record high of $134.12 and is now consolidating between $93 and $94. Investors are weighing potential dilution risks from the stock component of Netflix's offer against the anticipated long-term value of WBD assets, including HBO and the DC Universe.

Strategic Shifts and Scrutiny

A successful acquisition would mark a pivotal moment for the global media landscape, repositioning Netflix from a focus on organic growth to an active consolidation strategy. The goal is to secure a durable lead in premium content within a saturated streaming market.

• The Structure of the Bids: Netflix's proposal stands at about $27.75 per WBD share, a blend of cash and stock. WBD's board formally rejected Paramount's hostile offer on December 17 and has endorsed the Netflix deal, citing long-term strategic fit and expected synergies as decisive factors.
• The Paramount Challenge: Despite the rejection, Paramount remains a formidable player. Its cash proposition is particularly attractive to short-term arbitrage investors. The WBD board, however, has raised concerns over the transparency and financing structure of Paramount's bid, which relies on an Ellison family-backed trust.
• Financial Implications: The new $25 billion facility will increase Netflix's leverage, drawing skepticism from some institutional investors. Conversely, it provides the firepower to compete at current market prices without launching a large-scale equity offering.
• Trading Dynamics: Trading volume remains elevated, with over 39 million Netflix shares recently changing hands. A short-term floor appears to have formed at $91.00, indicating a cautious market stance.

Analyst Views and Regulatory Hurdles

Analyst perspectives are mixed. Jefferies reaffirmed its Buy rating and $134 price target on December 17, arguing that integrating the Warner library could grant Netflix a nearly insurmountable competitive edge, despite near-term financial pressure.

Morningstar offers a more cautious view, assigning a "High Uncertainty" rating. It highlights the integration risks of absorbing a major traditional film studio into the Netflix operating model.

Looming over the process is regulatory scrutiny. Media reports from December 21 suggest the Trump administration is likely to examine the merger closely. President Trump has publicly stated the deal "could be a problem," citing potential antitrust issues from combining two leading premium streaming platforms (Netflix and Max). This regulatory uncertainty is considered a key reason the stock trades well below its 2025 peaks.

The Road Ahead: A Pivotal Timeline

The year-end brings a critical period for Netflix:

• Shareholder Decision: The outcome ultimately rests with WBD shareholders. Netflix must convince institutional investors that the long-term value creation of a combined entity outweighs the immediate cash premium from Paramount's offer.
• Key Technical Levels: Traders are monitoring support at $91.33. A break below could open a path toward the 52-week low near $82.00. On the upside, clear progress in the merger process could fuel a recovery toward resistance around $105.
• Q4 Earnings Focus: Fourth-quarter 2025 results, scheduled for mid-January 2026, are highly anticipated. Management is expected to provide updated guidance on debt sustainability and the pro-forma financial structure of the combined company.

The coming weeks will therefore be decisive for both the outcome of this acquisition battle and the future financial profile of Netflix.