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Warner Bros Board Rejects Paramount’s $108B Bid, Backs Netflix Deal
Warner Bros Discovery rejects Paramount-Skydance’s $108B hostile bid, citing financing risks, and confirms Netflix’s $27.75/share merger as superior. Paramount called out for misleading shareholders.
MH
by Muhammad Hashir
2025-12-17
Warner Bros Board Rejects Paramount’s $108B Bid, Backs Netflix Deal

Warner Bros Discovery’s (WBD.O) board has rejected Paramount Skydance’s (PSKY.O) $108.4 billion hostile takeover bid, citing insufficient financing guarantees and substantial risks to shareholders. The board emphasized that Paramount consistently misled shareholders regarding the backing of its $30-per-share cash offer by the Ellison family.

Paramount had claimed that the Ellison family, led by billionaire Oracle co-founder Larry Ellison, fully guaranteed the offer. However, Warner Bros stated in a regulatory filing that the guarantee never existed, and the offer’s financing structure was “opaque and risky.”

In contrast, the Netflix (NFLX.O) deal for $27.75 per share, covering Warner Bros’ film and television studios, library, and HBO Max streaming service, is a binding agreement with robust debt commitments and requires no additional equity financing. The Warner Bros board noted that Netflix’s offer reduces structural risks and is in the best interest of shareholders.

Paramount, which has made six bids for Warner Bros, argued that its financing, including $41 billion in equity from the Ellison family and RedBird Capital and $54 billion in debt commitments, was sufficient. Warner Bros, however, disputed the credibility of the Ellison Revocable Trust, which underpins only a portion of the equity commitment and can withdraw its assets at any time.

The board further highlighted Paramount’s smaller $15 billion market capitalization and lower credit rating compared to Netflix’s investment-grade balance sheet, warning that Paramount’s leveraged deal could result in high debt levels and operational constraints, potentially weakening Hollywood’s content production ecosystem.

While Paramount sought to achieve $9 billion in operational synergies, Warner Bros described these targets as ambitious, likely leading to further layoffs. The board also dismissed Paramount’s claims of unfair treatment, noting extensive discussions and in-person meetings with Paramount executives to address deficiencies in each bid.

Netflix welcomed the board’s decision, with co-CEO Ted Sarandos stating the merger agreement is superior and in the shareholders’ best interest. Warner Bros has yet to announce a shareholder vote date, expected in spring or early summer.

The battle between Paramount and Netflix underscores the high-stakes competition in the media industry as streaming giants vie for content supremacy and studio assets, while ensuring financial stability and shareholder protection.
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WarnerBrosDiscovery

ParamountBid

NetflixAcquisition

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