Netflix's All-Cash WBD Bid Puts Pressure on Paramount: MoffettNathanson
Netflix's move to amend its bid for Warner Bros. Discovery to an all-cash offer speeds up the timeline for when the deal could potentially close, MoffettNathanson said Tuesday after Netflix announced the change to its original cash and equity bid. MoffettNathanson said WBD shareholders are expected to vote on the deal by April, and Netflix's amended bid likely puts more pressure on Paramount Skydance to potentially increase its rival offer.
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In a letter to shareholders Tuesday as it announced Q4 results, Netflix said the Warner Bros. library, development and intellectual property gives it "an even broader and higher-quality selection of content for members," while HBO Max would let it offer "more personalized and flexible subscription options." Netflix called WB a complementary business and said it planned to expand production capacity in the U.S. and elsewhere and spend more on original content over the long term.
MoffettNathanson said that while Netflix portrays its WBD interest as juicing its growth, there are also defensive aspects to the deal. Netflix might be looking to protect its third-party licensed content in case Paramount holds back content for its own streaming platform, the firm said. It's also possible Netflix could up its bid by as much as $2 a share if it needs to respond to a higher Paramount bid.