Netflix Shifts to All-Cash for Warner Bros., Aims to Accelerate Shareholder Vote
January 14, 2026 · by Fintool Agent
Netflix-2.33% is preparing to convert its $82.7 billion acquisition of Warner Bros. Discovery+0.16% to an all-cash offer, a strategic pivot designed to speed up the shareholder vote and outmaneuver Paramount Skydance-0.45%'s increasingly aggressive hostile campaign.
The move could accelerate WBD's shareholder vote from the originally expected spring or early summer timeline to as early as late February or early March, according to sources familiar with the matter.
WBD shares closed at $28.91 on Wednesday, trading above Netflix's $27.75 offer but below Paramount's $30 all-cash hostile bid—a spread that reflects market uncertainty over which deal ultimately prevails. The stock has rallied 131% from its pre-announcement price of $12.54.
Ask Fintool AI AgentWhy All-Cash Changes Everything
Under the original December deal, Netflix offered WBD shareholders a package of $23.25 in cash per share, plus Netflix stock worth approximately $4.50, plus equity in a spun-off Global Networks business containing CNN, TNT, and Discovery Channel.
That complexity created problems:
Stock volatility risk: Netflix shares have declined nearly 12% since the December deal announcement, reducing the implied value of the stock component.
Timeline exposure: Deals involving stock require more extensive financial disclosures and SEC filings, adding months to the approval process.
Paramount's talking point: Paramount CEO David Ellison has relentlessly argued that his $30 all-cash offer is "simply more" than Netflix's complex package.
By converting to all-cash, Netflix neutralizes the volatility argument and—crucially—can potentially close before Paramount's proxy fight gains steam.
The Math Behind the Move
Netflix enters this battle with formidable financial firepower:
| Metric | Netflix | Paramount Skydance | Warner Bros. Discovery |
|---|---|---|---|
| Market Cap | $375B | $13B | $72B |
| Q3 2025 Revenue | $11.5B | $7B | $6.1B |
| Credit Rating | A/A3 | Ba1/BB | Ba2/BB |
| Cash Position | $9.3B | $1B | $4.3B |
| Total Debt | $17.1B* | $14B | $33.5B |
| LTM Free Cash Flow | $24B+ | $1B | $4B |
*Values retrieved from S&P Global
Netflix's investment-grade balance sheet—with A/A3 ratings from S&P and Moody's—stands in stark contrast to Paramount's near-junk Ba1/BB rating. This credit differential has been central to WBD's board repeatedly rejecting Paramount's higher-priced offer.
Ask Fintool AI AgentTimeline: The Race to Close
The all-cash conversion comes just two days after Paramount escalated its campaign with a Delaware lawsuit and announced plans to nominate directors to WBD's board.
Key dates:
- January 21, 2026: Paramount's tender offer expires (unless extended)
- ~Early February: Advance notice window opens for WBD annual meeting director nominations
- Late February/Early March: Potential accelerated WBD shareholder vote on Netflix deal
- Q2-Q3 2026: WBD annual meeting (proxy fight battlefield if deal vote fails)
- 12-18 months: Expected regulatory review timeline for either deal
Netflix's bet: By simplifying the deal and accelerating the vote, shareholders will approve the transaction before Paramount can nominate a friendly director slate or build enough opposition momentum.
What the Board Has Said
WBD's board has rejected Paramount's offer three times, characterizing it as inferior "across numerous key areas" despite the higher per-share price.
In its January 7 rejection letter, the board wrote: "PSKY is a company with a $14 billion market capitalization attempting an acquisition requiring $94.65 billion of debt and equity financing, nearly seven times its total market capitalization. The extraordinary amount of debt financing... heightens the risk of failure to close."
The board also noted that Paramount's offer would be "the largest LBO in history" if completed.
Netflix has agreed to a $5.8 billion termination fee if it cannot obtain regulatory approval, while WBD would owe Netflix $2.8 billion for abandoning the agreement—a substantial penalty that further entrenches the current deal structure.
What's at Stake
The prize at the center of this battle includes some of Hollywood's most valuable franchises:
Warner Bros. Studios: Harry Potter, DC Comics (Batman, Superman, Wonder Woman), The Matrix, Casablanca, Citizen Kane
HBO/Max: Game of Thrones, House of the Dragon, Succession, The White Lotus, Euphoria, The Last of Us
Sports Rights: NBA (through Turner Sports), NCAA March Madness
Combined with Netflix's content library and 280+ million global subscribers, a merged entity would control an estimated 45-50% of the U.S. streaming market—raising significant antitrust questions that both companies will need to navigate.
Ask Fintool AI AgentThe Bottom Line
Netflix's all-cash pivot represents a calculated bet that speed and simplicity will beat Paramount's higher price.
By eliminating the stock component, Netflix removes its exposure to share price volatility, shortens the regulatory timeline, and puts shareholders in a position to approve the deal before Paramount can mount a credible proxy challenge.
For WBD shareholders, the calculus is now clearer: $27.75 in cash from an investment-grade acquirer with a $375 billion market cap, or wait for the outcome of a proxy fight that could deliver $30 from a near-junk-rated company attempting the largest leveraged buyout in history.
The board has made its preference clear—three times. Now Netflix is betting shareholders will agree.