Spending big to go all in! Netflix ramps up the bidding war with Warner by offering "all cash," vowing to build a subscription empire of 450 million users.

Spending big to go all in! Netflix ramps up the bidding war with Warner by offering "all cash," vowing to build a subscription empire of 450 million users.

Streaming giant Netflix has revised the terms of its acquisition of Warner Bros. Discovery’s film and streaming businesses to an all-cash payment, offering $27.75 per share to counter Paramount.

According to a Bloomberg report on Tuesday, Netflix's previous acquisition proposal included a mixed payment of cash and stock but has now been modified to full cash payment. Warner Bros. plans to hold a special shareholder meeting to approve the transaction, and Netflix says shareholders could complete the vote as early as April. This adjustment aims to speed up the process and address Paramount’s concerns about its bid.

If Netflix succeeds in the acquisition, the two companies would together have about 450 million subscribers, providing Netflix with a massive content library to compete against rivals like Disney and Amazon.

All-Cash Plan Removes Key Obstacle

The new terms remove Paramount’s main criticism of Netflix’s bid—the stock portion made its offer less attractive than competitors. Since the acquisition was announced on December 5 last year, Netflix’s shares have dropped nearly 15%, closing at $88 per share, far below the original plan’s minimum stock pricing of $97.91.

Netflix Co-CEO Ted Sarandos said in a statement that the Warner Bros. board "continues to support and unanimously recommend our transaction. We believe it delivers the best outcome for shareholders, consumers, creators, and the broader entertainment industry."

Warner Bros. emphasized in regulatory filings that the consideration for the acquisition is a fixed cash amount paid by an investment-grade company, which offers shareholders value certainty and immediate liquidity. Netflix has a market value of $402 billion and investment-grade credit rating, while Paramount only has a market value of $12.6 billion and its bonds are rated as junk by S&P.

Cable Asset Valuation Becomes Flashpoint

Warner Bros. disclosed for the first time the valuation of its cable TV network assets to be spun off to shareholders as independent company Discovery Global. According to adviser assessment, the cable networks are valued between $0.72 and $6.86 per share.

Paramount previously claimed these assets were worthless, even though cable networks account for the largest portion of its sales and profits. Paramount had applied to Delaware court on January 12 to accelerate information disclosure, but the judge rejected the request, saying Paramount failed to show it would suffer irreparable harm.

According to filings, Discovery Global will have $17 billion in debt as of June 30, 2026, falling to $16.1 billion by year-end. Better-than-expected cash flow last year means Discovery Global’s debt will be $260 million less than initially planned. The filings project the company’s 2026 revenue to be $16.9 billion, with adjusted EBITDA of $5.4 billion.

Leverage Advantage Highlights Financial Strength

The merger with Netflix would leave the combined company with around $85 billion in total debt, which is lower than the $87 billion in a Paramount merger. But the difference in financial leverage is notable—Netflix’s plan yields below 4x leverage, while Paramount’s is about 7x.

Warner Bros. reiterated in filings its rejection of Paramount’s offer, saying that even the $30 per share all-cash offer is inadequate considering "pricing along with numerous risks, costs, and uncertainties." The Warner Bros. board has repeatedly rejected Paramount’s bid. Paramount has threatened a proxy fight and filed a lawsuit demanding Warner Bros. disclose more information about Netflix’s offer and the cable asset valuation.

Institutional investors are divided over the two proposals, with some urging Paramount to raise its offer. In New York premarket trading, Warner Bros. shares fell less than 1% to $28.50, while Netflix shares rose by 1.2%.

Regulatory Approval Is the Final Barrier

Netflix and Warner Bros. executives met with regulators in Europe last week, trying to persuade them to approve the deal. Sarandos and Co-CEO Greg Peters told investors at a UBS conference on December 8 last year that they are "very confident" the transaction will be approved.

Hollywood unions and cinema owners have voiced concerns, believing the deal would hurt their members and business interests. Netflix is set to announce its Q4 earnings after the US market closes on Tuesday.

David Ellison advocates that merging with Paramount would retain a more traditional Hollywood structure and preserve some traditions at Warner Bros. He has been lobbying for his plan but has yet to convince a substantial majority of Warner Bros. board members or shareholders.

This bidding war, which began last September, reached a fever pitch after Warner Bros. announced a sale in October. The entry of streaming leader Netflix as an unexpected bidder has made this one of the biggest media deals in recent years.

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