Board urges shareholders to reject hostile Paramount offer
The board of Warner Bros. Discovery said Wednesday it unanimously recommends that shareholders reject a hostile takeover bid from Paramount Skydance and instead support a competing proposal from Netflix, which it described as offering “superior” and more certain value.
Paramount last week launched a $30-per-share all-cash tender offer directly to WBD shareholders, valuing the company at an enterprise value of $108.4 billion. Paramount Skydance CEO David Ellison has argued that the deal would face fewer regulatory hurdles and deliver greater long-term benefits than Netflix’s proposal.
WBD cites valuation and financing risks
After reviewing the offer, the WBD board concluded that Paramount’s bid undervalued the company and carried material execution risks. Board chair Samuel Di Piazza said the proposal imposed “significant risks and costs” on shareholders and lacked sufficient financial certainty.
In particular, the board raised concerns about Paramount’s financing structure. More than $40 billion of the funding is separate from the Ellison family, despite assurances that the offer was fully backstopped. The withdrawal of Jared Kushner’s Affinity Partners and the reliance on roughly $24 billion from Gulf state sovereign wealth funds further heightened concerns.
Netflix deal seen as cleaner and more certain
Netflix has proposed a cash-and-stock transaction for Warner Bros. Discovery’s streaming and studio assets, valuing the equity at $72 billion, or about $83 billion including debt. Under the plan, WBD’s cable networks would be spun off into a separate company.
According to the board, Netflix’s offer requires no external equity financing, includes strong debt commitments, and provides a high termination fee. With Netflix’s market capitalization exceeding $400 billion, directors said they were confident in the company’s ability to close the transaction.
Paramount leaves door open to higher bid
The rejection sets the stage for a potential escalation. Ellison has said the $30-per-share offer is not Paramount’s “best and final,” though the company indicated Wednesday that it does not plan to raise its bid at this time.
Some shareholders, including GAMCO Investors CEO Mario Gabelli, have suggested that keeping both bids in play could lead to improved terms, as pressure mounts on each suitor.
Antitrust questions remain for both sides
Di Piazza dismissed suggestions that regulatory approval would favor one deal over the other, noting that both transactions would face scrutiny from the U.S. Department of Justice. Netflix executives echoed that view, arguing that the streaming market remains competitive and that Netflix and HBO Max serve complementary audiences.
Warner Bros. Discovery expects to hold a shareholder vote in the spring or early summer, setting up a pivotal decision that could reshape the global media and streaming landscape.
