Warner Bros. Discovery Rejects Paramount $30/Share Acquisition Offer
Warner Bros. Discovery's board has formally rejected the $108 billion takeover bid from David Ellison's Paramount Skydance and reiterated its support for the Netflix deal. Paramount and Ellison's financial backers, including his father, tech billionaire Larry Ellison, will now evaluate the rejection and decide whether to make a higher offer.
Warner Bros. Discovery remains committed to its megadeal with Netflix, under which the streamer would buy the Warner Bros. studios, HBO, and HBO Max for $27.75/share. This deal is set to happen after WBD's planned Q3 2026 spin-off of Discovery Global, comprising the company's TV networks.
Warner Bros. Discovery stated that its board unanimously determined the Paramount Skydance tender offer, launched on December 8, 2025, is not in the best interests of WBD and its shareholders and does not meet the criteria of a 'Superior Proposal' under the terms of WBD's merger agreement with Netflix, announced on December 5, 2025. The board recommends that WBD shareholders reject Paramount's offer.
The letter to shareholders highlights that the Netflix merger terms are superior, as Paramount's offer provides inadequate value and imposes significant risks and costs on WBD. The company also documents the sequence of interactions with Paramount in a Schedule 14D-9 filing with the SEC.
According to the WBD board, Paramount has consistently misled shareholders about having a 'full backstop' from the Ellison family, which it never had. The most recent Paramount Skydance proposal includes a $40.65 billion equity commitment with no Ellison family commitment, relying on an unknown and revocable trust for deal funding.
The WBD board letter emphasizes that a revocable trust is not a secured commitment by a controlling stockholder, as its assets and liabilities are not publicly disclosed and are subject to change. The trust's liability for damages is capped at 7% of its commitment, which is insufficient to cover potential damages to WBD and its shareholders.
Additionally, the Paramount acquisition offer can be terminated or amended by Paramount at any time, making it non-binding. The Warner Bros. Discovery board also comments on Paramount's expectation of achieving $9 billion in cost synergies, which they believe would weaken Hollywood rather than strengthen it.
Warner Bros. Discovery chair Samuel Di Piazza Jr. stated that the board's evaluation of Paramount's tender offer concluded that the offer's value is inadequate, with significant risks and costs imposed on shareholders. The board is confident that the Netflix merger represents superior value and looks forward to delivering the benefits of their combination.
Netflix released a statement welcoming the WBD board's recommendation and highlighted the benefits of its deal with Warner Bros. Discovery. Ted Sarandos, Netflix co-CEO, expressed confidence in obtaining necessary approvals for the deal.
David Ellison had been courting Warner Bros. Discovery for 12 weeks, starting with a $19/share bid on September 14 and offering $30/share as of December 4. After WBD chose Netflix, Ellison launched a hostile takeover bid, announcing Skydance's offer directly to shareholders.
WBD's board had previously expressed concerns about Paramount's bid, backed by foreign investors, potentially triggering a national security review. Paramount disclosed that the Ellison family and RedBird Capital Partners would backstop the bid's equity financing. However, Paramount's offer is all-cash, and Netflix's agreement is 84% cash.
President Trump has also said he will be involved in the Warner Bros. deal review, criticizing the Ellisons for their perceived mistreatment by CBS News' '60 Minutes'.
The Warner Bros. Discovery board urges shareholders to carefully review the 14D-9 filing, which details the strategic review process and the board's recommendation to reject Paramount's offer and support the Netflix merger.
