Netflix has emerged as the frontrunner to acquire Warner Bros Discovery’s Hollywood studio and streaming operations, with the two sides now in exclusive talks, according to multiple US media reports.
Netflix is understood to have submitted the highest bid to date for Warner Bros Discovery’s studio and streaming assets, valuing the business at around $28 (€25.8) per share. The offer covers the Warner Bros film and TV studio, HBO and the HBO Max streaming service, and tops a revised proposal from Paramount Skydance pitched closer to $27 per share for the whole company.
Reuters says Netflix’s offer is mostly in cash and compares with Warner Bros Discovery’s recent closing share price of $24.54, with a deal potentially being announced within days. Bloomberg and other outlets have reported that Netflix has also put a $5 billion (€4.6bn) reverse break fee on the table if regulators block the transaction, underlining its confidence that the combination can be cleared.
Under the structure being discussed, Warner Bros Discovery would proceed with its previously announced plan to split into two listed companies, separating its Streaming & Studios division – housing Warner Bros, HBO and HBO Max – from its Global Linear Networks arm, which will contain CNN, TBS, TNT and other cable and international channels. The Netflix deal would focus on the streaming and studio side, leaving the linear portfolio as a separate entity.
The board of Warner Bros Discovery launched a formal sale process after rejecting a nearly $60 billion (€55.2bn) mostly cash offer from Paramount Skydance for the entire group in October.
Paramount has protested the way the auction has been run, accusing Warner Bros Discovery of favouring Netflix. In a strongly worded letter published by US media, the company’s lawyers complained of a “tilted and unfair” process and urged the WBD board to ensure an independent special committee oversees any decision.
Netflix, Warner Bros Discovery, Paramount Skydance and Comcast have all so far declined to comment publicly on the latest reports, and the WBD board is still weighing its options between a sale, a split, or a combination of both paths.
