AceShowbiz - Netflix has made a major shift in its bid for Warner Bros., now valued at $83 billion. The streaming service announced on Tuesday that it has transitioned its proposal to an all-cash offer, removing the previously included $4.50 in Netflix stock from its original proposal. This adjustment is poised to heighten competition with David Ellison’s Paramount, which has been asserting that its offer of $30 per share in cash is distinctly more advantageous.

With this revision, Netflix is now presenting a cash offer of $27.75 per share for Warner Bros., while allowing Discovery Global to operate as an independent entity.

The ongoing tussle for WBD is expected to center around the perceived value of the “stub” company, which will play a crucial role in determining which offer holds more merit: Netflix’s bid for Warner Bros. and a stake in Discovery or Paramount’s comprehensive proposal for the entire package.

In a recent proxy filing, WBD detailed its assessment of the standalone value of Discovery Global, providing a spectrum of potential valuations for its stock as a separate entity, ranging from $1.33 to $6.86 per share.

The analysis of comparable public companies on a holistic basis suggested an implied equity value range for Discovery Global between $1.33 and $3.24 per share. Meanwhile, a sum-of-the-parts valuation indicated a slightly higher range of approximately $2.41 to $3.77 per share, in line with the Versant comparison.

In contrast, Paramount contended in a filing earlier this month that Discovery's value should realistically be pegged between $0 to $0.50 per share, based on the stock performance of Versant.

Nonetheless, the board of WBD asserted that the potential for future acquisition deals hinted at a more favorable valuation, with their selected transactions analysis suggesting an implied equity value reference range for Discovery Global of $4.63 to $6.86 per share.

Paramount has maintained that whatever the ultimate valuation is, it would likely be less than the $30 per share offer it is making, which it argues provides a clearer and quicker regulatory approval process.

WBD further indicated that when it originally crafted the Netflix deal, it had received an estimated implied equity value reference range for Discovery Global between $0.42 and $2.09 per share, a range that has seen notable improvements since then.