Warner Bros. Discovery Rejects Paramount’s $108B Bid

The board of directors at Warner Bros. Discovery (WBD) has formally advised its shareholders to reject the $108 billion hostile takeover attempt launched by David Ellison’s Paramount Skydance. In a sternly worded communication, the company characterized the unsolicited bid as “illusory,” citing significant concerns regarding the transparency of the offer’s financial structure.

Disputing Financial Backing

At the center of the dispute is the claim of financial security. The WBD board alleges that Paramount has repeatedly misrepresented the nature of its funding to shareholders, specifically regarding the involvement of the Ellison family.

According to the board’s letter to investors, Paramount has asserted that its transaction was supported by a “full backstop” from the Ellison family. The board explicitly countered this narrative, stating: “It does not, and never has.”

Preference for Netflix Merger

WBD leadership maintains that the path forward remains a merger with Netflix, which they describe as a superior strategic move. The board highlighted key differences between the competing proposals:

• Binding Commitments: The Netflix deal is a formal agreement with enforceable terms.
• Financial Certainty: Unlike the Paramount bid, the Netflix offer requires no additional equity financing and includes robust debt commitments.
• Valuation: The Netflix offer, valued at $27.75 per share, is specifically targeted at Warner Bros’ Hollywood studio and streaming operations.

Netflix co-CEO Ted Sarandos issued a formal statement acknowledging the board’s decision. Sarandos noted that the recommendation confirms the Netflix merger is the most beneficial path for stockholders.

Next Steps for Paramount

The rejection leaves Paramount and its backers—including tech billionaire and father of David Ellison, Larry Ellison—at a crossroads. As reported by Variety, the group is currently evaluating the board’s formal rejection to determine if they will attempt to revise their bid or pursue alternative strategies.