Netflix tried to make its bid for Warner Bros. Discovery more attractive by switching to an all-cash offer, but investors aren’t exactly cheering. The streaming giant amended its proposal to pay $27.75 per share entirely in cash instead of mixing cash with Netflix stock.
While this move simplifies the deal and speeds up the approval process, it hasn’t solved the company’s biggest problem.
Netflix’s strategic shift to all-cash payment doesn’t address the fundamental issue: their offer remains $2.25 per share below Paramount’s competing bid.
The real disappointment stems from what Netflix didn’t do. The all-cash offer still sits at $27.75 per share, which remains below Paramount Skydance‘s competing bid of $30 per share.
Investors were hoping Netflix might sweeten the deal by raising its offer, but instead the company just changed how it would pay the same amount. That’s like offering to pay for something with different bills rather than actually offering more money.
Market reactions reflected this lukewarm response. Warner Bros. Discovery shares slipped 0.7% after the announcement, suggesting shareholders weren’t impressed.
Netflix stock rose only 0.7% to $88.62 in early trading, hardly a victory celebration. The amendment came after Netflix’s stock decline had already eroded the value of the original cash-and-stock proposal, making the shift to all-cash more of a defensive move.
This bidding war puts Warner Bros. Discovery in an interesting position. The company’s board previously rejected Paramount’s hostile $30-per-share bid, calling it inferior to Netflix’s deal despite the higher price tag. Both boards approved the amended all-cash transaction, signaling continued support for the Netflix merger over competing offers.
Meanwhile, Paramount is pursuing a hostile takeover and planning to nominate its own director slate at the next shareholder meeting.
Netflix’s bid targets valuable assets including Warner Bros. studios responsible for “Casablanca,” “Batman,” and “The Matrix,” plus HBO streaming operations. The deal excludes basic cable channels, which will be spun off separately. Netflix arranged $42.2 billion of bridge loans with Wall Street banks to help finance the all-cash transaction.
Shareholders are expected to vote by April, with Paramount urging them to sell shares by Wednesday. This high-stakes battle could reshape the entertainment industry’s competitive landscape, though investors clearly wish Netflix had brought more firepower to the fight. The outcome may also affect broader market trends by influencing diversification benefits for media investors.
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