Netflix is reportedly considering revising its proposed deal for Warner Bros studios and streaming assets into an all-cash offer, as competition with Paramount over the media group continues to escalate.
According to a Bloomberg report, the streamer has discussed removing the stock component from its existing cash-and-share proposal. The move would come as Paramount continues to promote its rival all-cash bid as more attractive to Warner Bros Discovery shareholders.
Netflix’s current offer values the Warner Bros business at $27.75 a share, combining cash and Netflix stock. Paramount, by contrast, has tabled a $30-a-share all-cash offer and is urging Warner Bros Discovery shareholders to tender their shares by a January 21 deadline. The Warner Bros Discovery board has twice advised shareholders to reject the Paramount bid and has reaffirmed its support for the Netflix agreement.
The dispute has now entered the courts. Paramount has filed a lawsuit in Delaware’s Chancery Court seeking access to documents related to the Warner Bros Discovery board’s decision-making process and financial calculations in choosing Netflix over its offer. Paramount has also signalled plans for a proxy fight, saying it intends to nominate its own slate of directors in an effort to overturn the Netflix deal from within the boardroom.
Warner Bros Discovery has dismissed the lawsuit as without merit and has argued that a merger with Paramount would carry greater risks for both the company and its shareholders. Paramount has rejected that claim. Some Warner Bros Discovery shareholders have also expressed surprise that Paramount has not increased its offer beyond $30 a share.
Netflix declined to comment on the report. However, investor reaction appeared positive, with Netflix shares rising by around one per cent despite a broader market decline.
