Netflix has criticised Paramount’s $108 billion bid for Warner Bros Discovery, warning that the rival studio already carries heavy debt.
Netflix’s co-chief executive, Greg Peters, told the Financial Times that Paramount’s offer “doesn’t pass the sniff test,” and he pointed out that most WBD shareholders have not yet supported it.
Netflix Strikes Back
Consequently, Netflix is now pursuing an all-cash $82.7 billion bid, arguing that it provides a simpler, more reliable deal and could allow a shareholder vote as early as April.
If Netflix succeeds, it would gain control of Warner Bros’ century-old studio and HBO’s blockbuster catalogue, including Game of Thrones and Harry Potter.
The acquisition would merge Netflix’s popular content with Warner’s legendary franchises.
Debt Vs Cash Strategy
The bids differ in financial structure.
Peters emphasised, “Paramount already is saddled with quite a lot of debt,” calling their $30-per-share offer “pretty crazy.”
Netflix stresses that its strong balance sheet allows it to complete the acquisition without risky borrowing.
Read Also: Afreximbank Drops Fitch As Credit Rating Agency
Furthermore, Peters added that without Oracle co-founder Larry Ellison’s personal backing, Paramount has “no chance in hell” of completing the deal.
Paramount combines $55 billion in debt and $40 billion in equity, backed by Ellison, yet it has secured only 7% of WBD shares, far below the 50% needed for control.
Analysts question whether Paramount can realistically increase its offer given existing leverage.
A Hollywood Shake-Up
Meanwhile, Netflix, with 325 million subscribers worldwide, relies on its financial strength to execute a straightforward transaction.
A merger could redefine Hollywood, potentially shortening theatrical windows and releasing films directly to streaming platforms.
Paramount defends its strategy, with RedBird Capital’s Gerry Cardinale calling Netflix’s offer “smoke and mirrors.”
As the contest unfolds, Netflix positions itself as disciplined, while Paramount appears over-leveraged, setting the stage for a dramatic Hollywood showdown.
