The deal may "shift gears": from cash + stock to all-cash
According to several media outlets citing insiders, Netflix is considering adjusting its acquisition approach for Warner Bros. Discovery (WBD)'s related assets, with the key move being from the initial "cash + stock" structure to a more straightforward all-cash arrangement. Market interpretations suggest this move aims to simplify terms, compress advancement time, and reduce the impact of stock price volatility on transaction pricing.
Under the previously disclosed terms, Warner shareholders were originally set to receive $23.25 per share in cash and $4.50 in Netflix common stock, along with a protective mechanism linked to Netflix's stock price level. As Netflix's stock price has retreated since the acquisition was proposed, the "viability" and communication costs of the deal structure have also increased.
Financing strategy: $59 billion bridge loan and refinancing progress
The report also mentions that to support this merger and acquisition, Netflix has secured approximately $59 billion in financing arrangements from a consortium of Wall Street banks, described as one of the largest bridge loans in history. Part of this debt has been refinanced through the issuance of long-term bonds (around $25 billion). Credit research points out that Netflix still has the space to continue financing, and its credit status may not be significantly strained under the current balance sheet context.
Rival offer: Paramount's "higher all-cash bid" + lawsuit + proxy fight
The acceleration of this merger is also linked to the offensive from competitors. Reuters and others report that Paramount Skydance has made a higher all-cash offer to Warner (reportedly $30 per share, totaling approximately $108 billion) with financial backing from Oracle co-founder Larry Ellison. Simultaneously, Paramount is seeking transaction details and valuations through litigation while preparing to nominate directors and push for shareholder-level opposition.
Paramount also released a statement emphasizing that its offer is "superior" and disclosed the latest steps in advancing its acquisition efforts.
Market reaction: Slight strengthening of both stock prices, but uncertainty remains
In response to the news of a potential shift to all-cash, related reports indicate a slight rise in the stock prices of Warner and Netflix on the day. However, most interpretations suggest that the real determinant of the next phase's pace remains the board and shareholder dynamics, financing feasibility, and the progress of antitrust and regulatory reviews.
