Netflix goes all-cash on Warner deal, aiming for April shareholder vote

[The Financial News, New York=New York correspondent Lee Byung-chul] Netflix reached a new agreement on the 20th (local time) to acquire, entirely in cash, Warner Bros. Discovery’s key assets: its studio operations and the HBO Max streaming platform. The company abandoned the previous cash-and-stock mix and simplified the structure by offering 27.75 dollars per share. At the same time, Warner Bros. Discovery also disclosed financial details of its spin-off plan to separate its cable networks division into a standalone company.
Warner Bros. Discovery and Netflix expect that, under the revised structure, shareholders will be able to vote on approving the deal by April. By simplifying what had been a complex arrangement, the companies aim to speed up the closing process. Greg Peters, Netflix co-chief executive officer (CEO), said, "The amended agreement demonstrates our commitment to this transaction," and emphasized that it would accelerate the timetable.
Market observers view the revised terms as a move made with Paramount’s competing bid in mind.
Paramount is continuing to push a 77.9 billion dollar all-cash hostile takeover bid for the entirety of Warner Bros. Discovery. Earlier this month, it even signaled a proxy fight aimed at replacing Warner Bros. Discovery’s board of directors.
By contrast, Warner Bros. Discovery and Netflix said the value of Netflix’s offer remains at 72 billion dollars.
Under the new agreement, the amount of Warner Bros. Discovery debt—previously 260 million dollars—that would have been transferred to Warner Bros. Discovery Global has been reduced. Warner Bros. Discovery Global will house cable channels such as Cable News Network (CNN), Turner Network Television (TNT), and Food Network. Warner Bros. Discovery cited stronger-than-expected cash flow last year as the reason it was able to cut its debt load.


pride@fnnews.com New York correspondent Lee Byung-chul Reporter