Warner Bros. Discovery’s board has once again turned down a bid from Paramount and advised shareholders to stick with Netflix’s competing offer. In a letter to shareholders, Warner Bros.’ board expressed concerns over Paramount’s revised $108.4 billion hostile bid, describing it as a risky leveraged buyout that investors should avoid. The board highlighted the significant debt financing required by Paramount’s offer, which increases the risk of completion, while reaffirming its support for Netflix’s $82.7 billion deal for the film and television studio and other assets.
Warner Bros. Discovery chair Samuel Di Piazza Jr. emphasized the superior value and certainty offered by the binding agreement with Netflix, stating that Paramount’s bid would impose significant risks and costs on shareholders. Paramount and Netflix have been competing to acquire Warner Bros., known for its valuable entertainment franchises such as Harry Potter, Game of Thrones, Friends, and the DC Comics universe, as well as classic films like Casablanca and Citizen Kane.
Despite Paramount’s continued efforts, Warner’s leadership has consistently rejected their bids, urging shareholders to back the sale of the streaming and studio business to Netflix. Paramount recently secured an “irrevocable personal guarantee” from Oracle founder Larry Ellison to support $40.4 billion in equity financing, alongside a promised payout of $5.8 billion to shareholders if the deal faces regulatory obstacles.
The board of Warner Bros. issued a 67-page amended merger filing outlining the reasons for rejecting Paramount’s offer, citing the significant costs associated with the bid compared to the Netflix deal. Netflix’s co-CEOs Ted Sarandos and Greg Peters welcomed Warner Bros.’ decision, emphasizing their deal as the superior proposal delivering the greatest value to stockholders, consumers, creators, and the entertainment industry.
Paramount’s hostile bid remains active, and Warner shareholders have until Jan. 21 to decide whether to “tender” their shares. The battle between Netflix and Paramount for Warner’s assets is complicated by their differing priorities, as Netflix aims to acquire the studio and streaming business while Paramount seeks control of the entire company, including networks like CNN and Discovery.
The potential merger with either company is expected to face intense antitrust scrutiny, with the U.S. Justice Department likely to review the transaction. Political considerations, including U.S. President Donald Trump’s involvement, could also influence the outcome. The impact of the deal on the entertainment industry, including movie production, distribution channels, and news media, is anticipated to be significant.
