Netflix is one step closer to pulling off one of the biggest entertainment takeovers in recent history. The streaming giant is now in exclusive negotiations to purchase Warner Bros Discovery’s film and television studios, as well as its streaming businesses, after putting forward an offer priced at $28 per share, according to a source with direct knowledge of the discussions. Warner Bros Discovery, the owner of HBO, has spent months weighing strategic options. A second round of bids arrived this week following initial proposals from Netflix, Paramount Skydance and Comcast. Reuters previously reported that Netflix submitted a mostly cash offer and ultimately surfaced as the frontrunner. At $28 per share, Netflix’s bid exceeds Warner Bros Discovery’s closing price of $24.54 on Thursday, and also tops a nearly $24 proposal made by Paramount that covered the company’s entire portfolio, including its cable channels such as CNN, TNT and TBS. The move marks another bold shift in Netflix’s strategy as it pushes beyond its core subscription business to tap additional revenue sources. Securing Warner Bros, home to franchises including Harry Potter, Game of Thrones and DC Comics, would place Netflix in control of some of the world’s most valuable entertainment properties and move it towards becoming a vertically integrated powerhouse that produces, distributes and monetises major IP on its own platforms. The company has also been extending its reach into gaming, live content and consumer experiences. Bloomberg News reported that Netflix is willing to pay a breakup fee of $5 billion if regulators block the transaction, and that the two companies could unveil a formal agreement within days, according Reuters. The possibility of the takeover has triggered industry pushback. Variety reported that a consortium of prominent film figures has called on the US Congress to intervene should Netflix’s attempt succeed, warning of a “looming economic and institutional crisis” across Hollywood. Meanwhile, CNBC said on Thursday that Paramount has accused Warner Bros of conducting a sale process that unfairly benefits Netflix over other bidders. The network cited a letter sent by the newly merged media company. “We strongly urge you to empower such a special committee comprised of directors with no potential appearance of bias or beholdenness to others whose interests may differ from those of the stockholders,” Paramount’s legal team wrote in the letter, cited by Reuters. The latest bidding follows a failed attempt earlier this year: in October, Warner Bros declined an estimated $60 billion takeover offer from Paramount for the entire business before launching a more structured sales process for its assets.
About the Author
