Warner Bros. Discovery’s board has once again turned down a bid from Paramount and advised shareholders to stay with Netflix’s competing offer. In a communication to shareholders, Warner Bros.’ board characterized Paramount’s revised $108.4 billion hostile bid as a risky leveraged buyout that investors should decline. The board highlighted that Paramount’s proposal relies heavily on debt financing, increasing the risk of the deal closing. They reiterated their support for Netflix’s $82.7 billion agreement for the film and television studio along with other assets.
Warner Bros. Discovery chair, Samuel Di Piazza Jr., stated, “Our binding agreement with Netflix will provide better value with higher levels of certainty, without the significant risks and costs associated with Paramount’s offer.” Paramount and Netflix have been contending 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.”
Warner’s leadership has consistently rejected Paramount’s offers and suggested that shareholders support the sale of the streaming and studio business to Netflix instead. Paramount recently announced an “irrevocable personal guarantee” from Oracle founder Larry Ellison to support $40.4 billion in equity financing for their bid. Paramount also raised its promised payout to shareholders to $5.8 billion if regulators block the deal, matching Netflix’s offer.
Paramount’s financing plan would burden the smaller Hollywood studio with $87 billion in debt post-acquisition, making it the largest leveraged buyout in history. The Warner Bros. board detailed these points in a 67-page amended merger filing explaining why they turned down Paramount’s offer. Netflix co-CEOs, Ted Sarandos and Greg Peters, welcomed Warner Bros.’ decision, emphasizing their deal as the superior option offering the greatest value to stakeholders, consumers, creators, and the entertainment industry at large.
While Paramount did not immediately respond to requests for comments, their hostile bid remains active, with Warner shareholders having until Jan. 21 to “tender” their shares. The battle for Warner intensifies as Netflix and Paramount have different acquisition objectives. Netflix seeks to acquire Warner’s studio and streaming business, including TV and movie production arms and platforms like HBO Max. In contrast, Paramount aims to acquire the entire company, encompassing networks such as CNN and Discovery.
If Netflix succeeds, Warner’s news and cable operations would be separated into their entity, as previously announced. Any merger with either company will face intense antitrust scrutiny, likely prompting reviews by the U.S. Justice Department and other regulators worldwide. Political influences are expected, especially under U.S. President Donald Trump, who has hinted at personal involvement in the deal’s outcome. The impact of either acquisition on the entertainment industry, movie production, distribution channels, and news media landscape is anticipated to be significant.
