Netflix is preparing an all-cash offer for Warner Bros Discoveryâs studios and streaming businesses, a source familiar with the matter told Reuters on Tuesday.
The move is aimed at expediting a sale that could take months to complete and has faced opposition from politicians and rival bidder Paramount Skydance, the source added.
Bloomberg News reported the development earlier on Tuesday. Netflix declined to comment on the Bloomberg report, while Warner Bros did not immediately respond to a Reuters request for comment.
Upon close on Tuesday, Netflix shares rose 1.02%, and Warner Bros shares increased 1.62%, while Paramount shares remained flat.
Netflixâs original $82.7 billion deal included cash and stock for Warner Brosâ film and streaming assets. Paramount, meanwhile, offered $108.4 billion in cash for the entire company, including its cable TV operations.
Warner Bros has reportedly favoured Netflixâs deal, despite amendments to Paramountâs bid, which included $40 billion in equity backing from Oracle co-founder Larry Ellison, father of Paramount CEO David Ellison.
Warner Brosâ board has argued that Paramountâs offer relies heavily on debt financing, raising risks for deal completion, and described the offer as âinadequate.â
Paramount and Netflix are engaged in a heated competition for Warner Bros, which houses high-profile franchises including Harry Potter, Game of Thrones, Friends, the DC Comics universe, and classic films such as Casablanca and Citizen Kane.
Lawmakers from across the political spectrum have expressed concern that further media consolidation could increase costs and reduce consumer choice.
On Monday, Paramount sued Warner Bros seeking more information on its deal with Netflix and said it planned to nominate directors to the Warner Bros board.
Paramount claims its all-cash bid of $30 per share is superior to Netflixâs previous cash-and-stock offer of $27.75 per share for the studios and streaming assets, arguing it would more easily navigate regulatory approval.
Netflix has agreed to a $5.8 billion termination fee if regulators block the deal, while Warner Bros would owe $2.8 billion to Netflix if it abandons the agreement.
Faridah Abdulkadiri
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