Netflix has lined up $59 billion of financing from Wall Street banks to help support its planned acquisition of Warner Bros. Discovery, which would make it one of the largest ever loans of its kind, Bloomberg reported.
Wells Fargo, BNP Paribas and HSBC are providing the unsecured bridge loan, according to a statement Friday, a type of financing that is typically replaced with more permanent debt such as corporate bonds.
Under the deal announced Friday, Warner Bros. shareholders will receive $27.75 a share in cash and stock in Netflix. The total equity value of the deal is $72 billion, while the enterprise value of the deal is about $82.7 billion.
Netflix shares dropped more than 4% in premarket trading.
Bridge loans are a crucial step for banks in building relationships with companies to win higher-paying mandates down the road.
A loan of $59 billion would rank among the biggest of its type, Anheuser-Busch InBev SA obtained $75 billion of loans to back its acquisition of SABMiller Plc in 2015, the largest ever bridge financing, according to data compiled by Bloomberg.
