Streaming giant Netflix (NFLX) has intensified the bidding war for Warner Bros. Discovery (WBD), which has put itself up for sale. Paramount Skydance (PSKY), Netflix, and Comcast (CMCSA) submitted their second round of binding bids by the December 1 deadline set by Warner Bros. While details of the offers remain confidential, because the bids are binding, WBD could soon enter exclusive negotiations with one of the bidders.
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Netflix has sweetened its offer by proposing a mostly cash deal, matching similar moves by rival Paramount. Warner Bros. Discovery previously rejected Paramount’s initial bids, calling them undervalued.
Warner Bros. Aims to Finalize Deal by Christmas
Warner Bros. intends to complete the sale as early as Christmas. Meanwhile, it is proceeding with a planned corporate split into Warner Bros. and Discovery Global, expected by April. The company is open to selling either the entire business or selected divisions. Paramount Skydance aims to acquire all WBD units, including studios, news operations, and legacy TV assets. In contrast, Comcast and Netflix are focused solely on WBD’s movie and television studios and the HBO Max streaming service.
Warner Bros. Could Fetch $70B in Value
Paramount Skydance’s last bid reportedly valued WBD at approximately $60 billion through a combination of cash and stock. However, WBD seeks higher offers, reflecting the value of its vast movie library, franchises, legacy studios, and CNN news platform. Analysts estimate the company could command a valuation closer to $70 billion, while its current market capitalization is around $59 billion.
Regulatory challenges loom for all bidders, with Netflix likely facing the toughest scrutiny. According to a New York Post report, Netflix’s acquisition poses “unique antitrust concerns” since it is the current streaming market leader. Acquiring Warner Bros. would add the fourth-largest streaming platform to its portfolio, intensifying competition concerns.
Is NFLX Stock a Strong Buy?
Yes, analysts remain highly optimistic about Netflix’s long-term outlook. On TipRanks, NFLX stock has a Strong Buy consensus rating based on 28 Buys, seven Holds, and one Sell rating. The average Netflix price target of $139.13 implies 27.5% upside potential from current levels. Year-to-date, NFLX shares has gained 22.4%.
