Netflix readies all-cash bid as Warner Bros deal hits political and rival roadblocks

CALIFORNIA : Netflix is preparing to go all-cash to seal a blockbuster takeover of Warner Bros Discovery’s studios and streaming business, as resistance mounts from politicians, rivals and regulators, sources say.

The shift is aimed at speeding up a deal that could take months to close and has already become one of Hollywood’s most bruising takeover battles. Bloomberg first reported the move. Netflix declined to comment; Warner Bros did not respond.

Markets liked the sound of it. Netflix shares rose 1.02 per cent on Tuesday, while Warner Bros ended 1.62 per cent higher. Paramount was flat.

Netflix’s original $82.7 billion proposal mixed cash and stock for Warner Bros’ film and streaming assets. Paramount, backed by Skydance, countered with a richer $108.4 billion all-cash bid for the entire company, cable television included. It later sweetened the offer with $40 billion in equity backing from Oracle co-founder Larry Ellison, father of Paramount chief executive David Ellison.

Still, Warner Bros has leaned towards Netflix. Its board has argued that Paramount’s offer rests heavily on debt, raising the risk of collapse, and that the proposal “remains inadequate”.

At stake is one of the deepest vaults in entertainment: Harry Potter, Game of Thrones, Friends, DC Comics, Casablanca and Citizen Kane, among many others. Control of that library could tilt the balance of power in a streaming industry already reshaping cinema and television.

The fight is turning increasingly hostile. Paramount has sued Warner Bros seeking more detail on the Netflix talks and has said it will nominate directors to the Warner Bros board. It insists its all-cash offer of $30 a share for the whole company beats Netflix’s earlier $27.75 a share bid for selected assets and would face fewer regulatory hurdles.

Regulators may yet disagree. Lawmakers across the political spectrum have warned that further media consolidation could push up prices and shrink consumer choice.

To reassure sceptics, Netflix has agreed to a $5.8 billion break fee if regulators block the deal. Warner Bros would pay $2.8 billion if it walks away.

The battle now pits speed against size, certainty against ambition. In Hollywood’s new age of streaming empires, the final cut is still a long way off—and the drama is only getting louder.