Netflix (NASDAQ: NFLX) remains in focus on January 14 following reports that the streaming giant is considering a significant change to its bid for Warner Bros. Discovery assets.
According to sources that spoke for CNBC’s “David Faber”, the mass media behemoth may replace the stock portion of its $27.75 a share offer and make it an all-cash transaction instead.
Note that Netflix stock is currently trading nearly 30% below its price in early December, when it first confirmed plans of buying WBD assets.
Why is Netflix suddenly interested in going all cash
The rationale behind Netflix’s shift is twofold. First, its stock had fallen below the collar, trimming the effective value of its bid by roughly 30 cents per share.
That made the offer less appealing to WBD shareholders, who were left exposed to NFLX’s market volatility.
Second, an all-cash structure dramatically accelerates the shareholder vote.
Issuing stock requires extensive financial disclosures, accounting reviews, and regulatory filings.
This could have pushed the vote into late spring or early summer, as the chairman of Warner Bros. Discovery – Samuel Di Piazza indicated in a recent interview.
By removing the stock element, Netflix can “streamline” the process, potentially bringing the vote to as early as the final week of February, according to David Faber.
And speed matters here, as Paramount is lobbying hard to derail the NFLX-WBD deal.
How a cash offer sweetens the deal for WBD
For WBD shareholders, cash is king. An all-cash bid locks in value at $27.75 per share, eliminating the risk that Netflix’s stock could slide further before closing.
It also signals confidence: NFLX is willing to deploy billions upfront rather than hedge with equity.
Beyond certainty, the accelerated timeline is a strategic advantage for Warner Bros. Discovery Inc.
A quicker vote reduces the window for Paramount to sway shareholders or mount legal challenges.
The simplicity of cash lowers transaction costs as well — sparing WBD from the heavy accounting burden tied to stock issuance.
In short, the deal becomes cleaner, faster, and more secure — a combination that strengthens Netflix’s hand and reassures Warner Bros’ Discovery investors.
Was Paramount right all along?
While there are clear strategic benefits embedded in Netflix’s potential move to an all-cash deal, the sudden change also raises a provocative question: was Paramount right all along in contesting the supposed superiority of the NFLX bid?
After all, if the streaming giant must sweeten the deal with cash, perhaps the original stock-based offer wasn’t strong enough.
Paramount has argued in court that WBD’s board favoured Netflix unfairly — despite its own debt-laden proposal.
Now, with NFLX accelerating the vote and removing uncertainty, Paramount faces a compressed timeline.
If it wants to stay in the face, it must raise its bid or address WBD’s concerns – and that too quickly.
Whether this validates Paramount’s critique or simply underscores Netflix’s determination, what’s clear is: the battle for Warner Bros. Discovery just got sharper, faster, and far more dramatic.
The post Why is Netflix considering going all-cash for WBD assets? appeared first on Invezz
