Netflix Amends Warner Bros. Deal to All Cash in Bidding War

Описание: Netflix Inc. has lined up $8.2 billion of additional debt from a group of banks to help finance its amended, all-cash agreement to buy Warner Bros. Discovery Inc.’s studio and streaming business.
The company now has $42.2 billion of bridge loans in place, according to a filing Tuesday. They are a type of facility that is usually replaced with permanent debt like corporate bonds.
Netflix, which previously agreed to pay $27.75 a share in cash and stock for the Warner assets, will now pay the full amount in cash. Rival bidder Paramount Skydance Corp. has launched an all-cash $30-a-share tender offer for all of Warner Bros.
Netflix initially lined up $59 billion of financing from banks to help support its acquisition, including one of the largest-ever bridge loans. It subsequently refinanced some of that with longer-term debt, leaving about $34 billion to be syndicated before this week’s increase.. Bloomberg's Geetha Ranganathan joins to discuss on Bloomberg Intelligence.

With the amended agreement, Wells Fargo & Co. is providing $4.1 billion of incremental bridge loans, followed by BNP Paribas SA at $2.87 billion and HSBC Holdings Plc at $1.23 billion, according to the filing. A number of other banks are also participating in the wider bridge loan.
Netflix, a company that built its business on junk bonds, was once known as “Debtflix” before it started generating heavy cash flow. As the streaming giant looks to borrow heavily again, its balance sheet is stronger and the firm now carries investment-grade ratings. Some analysts have warned that its ratings are vulnerable to a cut to the BBB tier, the lowest levels of high grade.
The new terms for the proposed acquisition of Warner Bros. neutralize one of the primary criticisms from Paramount — that the stock portion of the Netflix offer makes its bid inferior. Larry Ellison is throwing his personal fortune behind Paramount’s bid, with an irrevocable personal guarantee of $40.4 billion in equity financing. 
Bank of America Corp., Citigroup Inc. and Apollo Global Management Inc. have each signed up for a for a third of the total $54 billion debt commitment for the Paramount bid. That bridge facility would be expected to be replaced by a combination of investment-grade secured debt and non-investment-grade unsecured components in dollars and euros.


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