Netflix revises offer to pay all cash for Warner Bros to stave off Paramount

In an effort to sweeten the pot for Warner Bros. Discovery (WBD) shareholders, Netflix is now offering cash for shares of the company, revising the cash-and-stock deal it had struck with WBD’s board earlier.

However, the streaming giant is still offering the same $27.75 the companies had agreed on for WBD’s movie studio and streaming assets, and the deal continues to value the company at $82.7 billion.

The new offer serves to simplify the deal structure, the companies said in a statement on Tuesday, “provides greater certainty of value,” and speeds up the timeline for a shareholder vote. Netflix said it would finance the deal with cash, debt, and “committed financing.”

The change-up comes as rival suitor Paramount Skydance has intensified efforts to win over WBD’s shareholders with its all-cash, $30-per-share offer for the entirety of the company, including getting a $40 billion guarantee from its CEO David Ellison’s billionaire dad, Oracle co-founder Larry Ellison.

Paramount last week also sued WBD for more information on Netflix’s offer and said it would nominate new members to Warner Bros.’ board, after WBD rebuffed its offer. The company also sought to expedite the lawsuit, but the court rejected that effort.

Netflix, for its part, had until now stuck to its original cash-and-share offer, enjoying the full backing of WBD’s board, which has resolutely rejected Paramount’s bids. WBD has argued that selling to Netflix would make for a better deal because the streaming giant has the capital to pay, and has said that Paramount’s deal poses “materially more risk,” as it would saddle the combined company with $87 billion in debt.

Warner Bros. has also called into question Paramount’s ability to function after the deal goes through, arguing that raising such amounts of debt would further worsen Paramount’s current “junk” credit rating, and has raised concerns about Paramount’s negative free cash flow, which would be exacerbated by the acquisition.