Netflix May Amend Warner Bros. Bid to Make It All Cash

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00:00We're now learning that Netflix is working on revised terms for its Warner Brothers

00:04Discovery acquisition. This, according to people familiar with the situation,

00:08and it could include making an offer that is all cash. Joining us right now is Chris

00:14Palmieri, our man out in Los Angeles. Talk a little bit more about what we know. We should

00:18point out Warner Brothers shares, which had been in the red for most of the day, spiking

00:21as you get closer to the close on the back of this news. Chris,

00:25what exactly is Netflix considering? Well, they're possibly amending the terms of their

00:31offer. We're not hearing that they're changing the overall price, but they would potentially

00:35make it all cash. There was a component about $4 out of the $27.75 that was going to be in

00:42Netflix stock. Netflix stock has taken a beating since this whole takeover war began, lost about

00:47a quarter of its value. And Netflix sees this as an opportunity to really just sort of strengthen

00:52the terms because they're competing against an all cash offer from Paramount.

00:57So it gets to this idea, though. I mean, I know there's been a lot of discussion about

01:01the differences in the financial differences, I should say, in the two bids. Of course,

01:06there's been a lot of speculation that the decision might ultimately hinge a little bit more on politics

01:10rather than anything not. Do we have any sense here that Paramount Skydance, given that what we

01:16learned yesterday about its effort to put a couple of members on the board and, of course, the lawsuit

01:21asking for more transparency in the process might actually sort of make whatever new offer Netflix

01:26puts on the table moot? Definitely not moot. I mean, the big takeaway here is that Netflix is in

01:33this. There's been a question mark. They were sort of a surprise bidder to begin with. This isn't their

01:37thing doing these big acquisitions. And so people wondered, you know, how how committed are they to

01:42this? This is a signal that they're still committed to doing this deal. Paramount from here, as they're

01:48trying to get more details about the valuation process that Warner Brothers went through public,

01:53they're continuing with their tender offer. If it comes down to a shareholder vote over the deal,

01:58they'll oppose that. If it comes down to an annual meeting, they will propose an alternative slate.

02:04So that's Paramount's strategy. Where do we stand right now, Chris? I mean, I know next week we're

02:09supposed to get Netflix earnings and a lot of people, of course, are going to assume that they're going

02:13to make some announcement or maybe some clarification on where we stand in this process. But do we have

02:18any idea about what the timeline is? I mean, does the board have to vote over at Warner Brothers and

02:23shareholders? Do they have to vote on this anytime soon? What's going on? So Warner Brothers has said

02:27that they would put this up to a shareholder vote sometime in late spring or early summer.

02:31Their annual meeting historically has been in early May. You could see either we don't know which of

02:38those events will happen and they could happen simultaneously. But over the next few months,

02:43Warner Brothers shareholders will will get some opportunity to vote.