Netflix Considers 'All-Cash' Offer for Warner Bros Acquisition... Countering Paramount

Global streaming platform Netflix is reportedly reviewing a new acquisition proposal that involves an all-cash payment method to gain an advantage in the acquisition battle for Warner Bros Discovery (hereafter Warner Bros).

⬦ "No stock mix... reviewing 100% cash payment"

On the 14th, Bloomberg reported that Netflix is preparing this proposal as a strategy to counter its competitor, Paramount SkyDance (hereafter Paramount), and to quickly finalize the deal.

Netflix signed a contract last month on the 5th to acquire Warner Bros' film and TV studio and streaming service HBO Max for $72 billion (approximately 106 trillion won). Initially, the acquisition payment was to be made in a mix of cash and Netflix stock, but they are now considering switching to an all-cash payment method.

According to the existing contract, Warner Bros shareholders will receive $27.75 per share, which consists of $23.25 in cash and $4.50 in Netflix stock value.

⬦ "Even if borrowing, maintaining rating"... Netflix's confidence with $59 billion in cash secured

Netflix has secured $59 billion in the form of bridge loans (short-term borrowings) for this acquisition, of which $25 billion has already been converted into long-term debt to secure liquidity.

Bloomberg Intelligence credit analyst Stephen Flynn assessed that Netflix has the financial capacity to maintain its current high credit rating even if it proceeds with additional borrowing.

⬦ Paramount in a hurry... resisting with lawsuits and proxy fights but insufficient?

Meanwhile, Paramount, which was the first to initiate the acquisition of Warner Bros last year, has recently taken legal action after its new acquisition proposal was rejected. Paramount has filed a lawsuit demanding the disclosure of transaction information with Netflix and plans to prevent the sale to Netflix through a proxy fight at the Warner Bros shareholders' meeting.

Last month, after the Warner Bros board chose Netflix in a competitive bidding process, Paramount declared the initiation of a hostile acquisition. Currently, Netflix is in the process of submitting the Warner Bros acquisition merger filing to U.S. authorities and undergoing the approval process.