The billionaire vs. Netflix: The battle for Warner Bros. picks up speed

According to Reuters, in recent weeks, Warner expressed doubts about the Ellison family’s commitment to the deal and about the stability of the financing, and the personal guarantee was intended to provide a direct response to these concerns. As part of the updated terms, Alison pledged not to change or cancel the family loyalty during the employment period.

At the same time, Paramount announced that it is leaving its offer of $30 per share in cash unchanged, but raising the regulatory cancellation fee to $5.8 billion and extending the validity of the purchase offer until January 21, 2026.

Shares rose following the report Warner Bros by about 4%, and a share Paramount strengthened by about 3%. However, the market estimates that this is a relatively late move, and analysts point out that it is not certain that the personal guarantee will be enough to change the position of Warner’s board of directors, which has already advised the shareholders to prefer the Netflix offer.

On the parallel front: Netflix strengthens the financing package

At the same time as Paramount’s move, too Netflix Works to show that it has a strong and clear financial backing for the deal. According to a Bloomberg report, the company restructured some of the loans it took for the purchase of Warner assets, replacing expensive and short-term financing with cheaper, longer-term loans.

As part of the move, Netflix received a credit line of 5 billion dollars and two additional loans of 10 billion dollars each, designed to facilitate debt management over time. After the change, about 34 billion dollars remained from the original loan that had not yet been distributed among the lending banks. The move strengthens the financing package that accompanies the Netflix offer and sharpens one of the main advantages that Warner’s management points to compared to Paramount’s offer.

In the background, as mentioned, there are two completely different purchase proposals. Netflix was the first to offer to acquire Warner Brothers Studios and the company’s streaming operations, including HBO, in a deal valued at approximately $82.7 billion, while splitting the cable assets into a separate company. Shortly after, Paramount offered to acquire all of Warner Bros. Discovery, including the traditional television networks, at a value of more than $108 billion, in an all-cash deal.

Warner’s board of directors has already recommended to the shareholders to prefer the Netflix offer, among other things due to the clarity of the financing and its assessment that the regulatory risk is lower – but the door remains open to improved offers.