Netflix (NASDAQ: NFLX) and Warner Bros Discovery (NASDAQ: WBD) amended their definitive agreement this past week, converting the pending transaction into an all-cash structure while keeping the headline consideration unchanged at $27.75 per Warner Bros share.
Under the revised structure, Warner Bros shareholders are slated to receive $27.75 per share in cash, and also retain the additional value tied to receiving shares of Discovery Global following its separation from Warner Bros.
Netflix and Warner Bros said the amendment is designed to “simplif[y] the transaction structure,” increase certainty of value for Warner Bros shareholders, and accelerate the timeline to a shareholder vote.
The amended agreement removes the prior market-linked equity component. In the previous structure, Warner Bros holders were to receive $23.25 in cash plus $4.50 in Netflix stock value per share at closing, with the stock portion governed by a collar based on a 15-day VWAP measured three trading days before closing. That collar kept $4.50 of value if Netflix VWAP fell between $97.91 and $119.67, shifted to 0.0460 Netflix shares if VWAP was below $97.91, and capped at 0.0376 shares if VWAP exceeded $119.67.
Warner Bros said the revised structure is expected to enable a shareholder vote by April 2026.
Netflix said it will finance the all-cash consideration through a mix of cash on hand, available credit facilities, and committed financing. The amended, all-cash deal was unanimously approved by both boards.
The shift to all-cash transaction interestingly came up a month after Paramount Skydance’s all-cash $108.4 billion hostile bid—$30.00 per Warner Bros share for the whole company—which the firm rejected.
Closing remains explicitly sequenced behind the separation of Warner Bros Discovery into two public companies, with Warner Bros and Discovery Global becoming separately traded entities. The separation is expected to be completed in six to nine months, and must occur prior to closing of the Netflix–Warner Bros. transaction.
The companies reiterated a closing expectation of 12–18 months from the date they originally entered into the merger agreement.
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