Wall Street cheered on Tuesday as Netflix flashed its cash reserves to secure Warner Bros Discovery. The streaming company is planning to switch to an all-cash offer for its $83 billion acquisition, a move that sent WBD shares up 1.6% and Netflix shares up 1%. The positive market reaction validates Netflix’s strategy to speed up the deal and defeat a hostile rival.
The rival, Paramount Skydance, has offered $108.4 billion for WBD. However, the bid is debt-heavy and has been rejected by WBD’s board as “inadequate.” Paramount is now attempting a hostile takeover by nominating new directors, but the market clearly prefers the stability of the Netflix proposal.
Netflix’s all-cash offer targets WBD’s studio and streaming businesses, including the Warner Bros film library. The deal excludes WBD’s linear networks like CNN and the Cartoon Network, which will be spun off. This focused approach allows Netflix to acquire high-growth assets while providing liquidity to shareholders.
However, the deal is not without risk. US politicians have expressed concern that a Netflix-WBD merger would create a streaming monopoly. The combined entity would control a vast share of the market, raising antitrust questions that could complicate the regulatory approval process.
Despite the regulatory shadows, the financial community is optimistic. The rise in stock prices indicates that investors believe the all-cash deal is the best way to unlock value from WBD’s assets. For Wall Street, cash remains the ultimate silencer of doubt.