Netflix Inc. (NASDAQ:NFLX) is reportedly preparing to revise the terms of its $82.7 billion deal to buy Warner Bros. Discovery (NASDAQ:WBD) to make it an all-cash offer, as it seeks to fend off Paramount Skydance’s (NASDAQ:PSKY) hostile bid.
The revised deal, aimed at offering WBD shareholders a quicker and simpler transaction, is still under negotiation and may change, the Financial Times reported on Tuesday, citing people familiar with the matter.
Netflix and WBD did not immediately respond to Benzinga‘s requests for comment.
Paramount Pressures WBD Over Netflix
The original agreement values WBD’s studio and streaming assets at $27.75 per share, with $4.50 payable in Netflix stock. Paramount, led by David Ellison, has offered $30 per share in cash for WBD, including its cable television division, and threatened a proxy fight to overhaul WBD’s board.
Netflix’s potential move comes as Paramount pressures WBD to reconsider its terms by offering a higher bid and initiating a lawsuit for financial transparency. Paramount argues that without this transparency, shareholders cannot properly assess its offer.
Ellison has repeatedly accused WBD’s board of refusing to engage or negotiate any of the terms of Paramount’s proposed deal. But he maintains that he is open to “constructive discussions” with Warner Bros.’ board.
Netflix’s original deal was agreed in early December. Almost immediately after this, Paramount took its $108 billion bid for the entirety of WBD, including its cable television division behind CNN, directly to shareholders.
WBD, which owns HBO studios, has already rejected Paramount’s bid twice.
Price Action: Shares in WBD rose 1.6% on Tuesday after Bloomberg News first reported that Netflix could revise the deal terms, in a sign that investors favored such a move. Meanwhile, since Netflix’s pursuit of WBD was made public in October, the streaming giant has lost more than a quarter of its value. NFLX closed up 1% on Tuesday.
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