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Warner Bros Board Rejects Paramount Hostile Bid, Moves Ahead with Netflix Deal
Warner Bros Discovery rejects Paramount Skydance’s $108B hostile bid, citing risky debt load; affirms $82.7B merger with Netflix as superior.
ND
by News Desk
2026-01-07
Warner Bros Board Rejects Paramount Hostile Bid, Moves Ahead with Netflix Deal

Warner Bros Discovery’s board has unanimously rejected Paramount Skydance’s revised $108.4 billion bid to acquire the studio, calling it a risky leveraged buyout that would saddle the company with $87 billion in debt. The board reaffirmed its commitment to an $82.7 billion deal with Netflix, citing lower financial risk and superior value for shareholders.

In a letter to shareholders, Warner Bros’ board highlighted that Paramount’s offer relies on an “extraordinary amount of debt financing” and expressed concern over the potential costs and execution risks if the deal were to fail. Paramount proposed funding the acquisition with $40 billion in equity personally guaranteed by Oracle co-founder Larry Ellison and $54 billion in debt, but the board warned this could strain the studio’s finances and credit rating.

The board noted that Paramount’s bid could also impede Warner Bros’ planned spin-off of its cable television networks into Discovery Global, including CNN, TNT Sports, and Discovery+. Paramount’s offer was deemed insufficient to compensate for potential damages to Warner Bros’ business if the transaction failed.

Despite Paramount amending its bid on December 22 with a personal guarantee and higher reverse termination fees, Warner Bros found the deal inadequate. Executives emphasized that Netflix’s merger proposal, though lower in headline value at $82.7 billion, offers clearer financing, fewer regulatory hurdles, and greater certainty of completion.

Netflix co-CEOs Ted Sarandos and Greg Peters welcomed the decision, calling the deal “the superior proposal that will deliver the greatest value to stockholders, creators, consumers, and the entertainment industry.”

The takeover battle marks one of Hollywood’s most closely watched acquisition contests, highlighting intensifying competition among studios and streaming platforms. Analysts note that a Paramount-Warner Bros merger would create a powerful competitor to Disney while consolidating two major television operators and two streaming services.

Warner Bros shares dipped slightly to $28.3 in premarket trading, while Netflix edged up. Paramount remained largely unchanged. Warner Bros Chairman Samuel Di Piazza said the company remains open to discussions but requires a “compelling” proposal from Paramount to reconsider.

Paramount has not issued an immediate response to the rejection. Observers suggest that while the current offer has been declined, further attempts by Paramount are still possible.
Tagged:

hollywood

Netflix

MergersAndAcquisitions

WarnerBros

Paramount
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