Warner Bros. Discovery Board Rejects Paramount's $108 Billion Hostile Bid
Warner Bros. Discovery's board rejected a hostile takeover bid from Paramount Global and Skydance Media, describing the offer as illusory and inferior to an existing agreement with Netflix.
The proposal, valued at $108.4 billion and structured as a $30-per-share cash offer, targeted Warner Bros. Discovery's film and television studios, HBO Max streaming service, and franchises such as Harry Potter.
Paramount claimed air-tight financing with $41 billion in new equity from the Ellison family and RedBird Capital, plus $54 billion in debt commitments from Bank of America, Citi, and Apollo.
The equity portion drew on the Lawrence J. Ellison Revocable Trust, holding more than $250 billion in assets including 1.16 billion shares of Oracle, but covered only 32% of the required equity and capped liability at $2.8 billion.
The board cited inadequate financing assurances and no direct commitment from the Ellison family as key issues.
"Paramount had 'consistently misled' Warner Bros shareholders that its $30-per-share cash offer was fully guaranteed, or 'backstopped,' by the Ellison family... It does not, and never has," the board stated in a letter.
Paramount's financial condition came under scrutiny, with its $15 billion market capitalization and credit rating a notch above junk, contrasted against Netflix's investment-grade rating and market value over $400 billion.
The offer's seven-party, cross-conditional structure presented numerous risks, including the trust's assets being withdrawable at any time without public disclosure.
Warner Bros. Discovery shares fell 1.2% to $28.5 in early trading, Netflix shares rose 2.5%, and Paramount shares dropped 4.8%.
The board dismissed Paramount's accusations of unfairness, noting dozens of calls and meetings with principals and advisors, including four in-person sessions with CEO David Zaslav and Paramount CEO David Ellison or his father, Larry Ellison.
Paramount executives described their proposal as offering more value and certainty with air tight financing, calling Warner Bros. Discovery's concerns absurd.
Netflix co-CEOs Ted Sarandos and Greg Peters welcomed the rejection, with Sarandos saying:
"The Warner Bros Discovery Board reinforced that Netflix's merger agreement is superior and that our acquisition is in the best interest of stockholders."
Netflix's deal involves acquiring Warner Bros. Discovery's movie studio and HBO Max, while Warner Bros.
Discovery plans a split into two entities by the third quarter of 2026, one for studio and streaming, the other for cable networks including CNN and TNT Sports.
Paramount's bid, launched as a tender offer on December 8, included backers such as three Middle East sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi, which would relinquish voting rights and governance roles per SEC filings.
U.S. lawmakers Sam Liccardo and Ayanna Pressley expressed national security concerns over foreign-backed financiers gaining influence.
Jared Kushner's Affinity Partners withdrew from financing, citing two strong competitors.
President Donald Trump supported Paramount's bid, criticizing CNN's management and indicating influence on regulatory review.
Paramount submitted six bids for Warner Bros. Discovery, including its television networks.
