The board of Warner Bros Discovery has rejected a $108 billion hostile takeover bid from Paramount Skydance, dismissing the proposal as inadequate and excessively risky despite a personal financing guarantee from Oracle co-founder Larry Ellison. The decision reinforces Warner’s commitment to a previously agreed deal with Netflix, which the board says offers superior value and significantly lower financial risk.
In a letter to shareholders, Warner said Paramount’s bid for the entire business, including its television networks such as CNN, would amount to the largest leveraged buyout ever attempted. The board said the transaction would saddle the company with an additional $54 billion in debt financing from lenders including Bank of America, Citigroup and Apollo, on top of Paramount’s existing obligations. It described the structure as aggressive and warned that it posed materially greater risk than the Netflix transaction.
The Paramount Skydance offer was bolstered shortly before Christmas by a pledge from Ellison, one of the world’s wealthiest individuals, to provide an irrevocable personal guarantee covering $40.4 billion in equity financing as well as any potential damage claims. The move was intended to address concerns raised by Warner’s directors, who have repeatedly rebuffed Paramount’s advances since September.
Despite the guarantee, Warner’s board said the Paramount proposal would impose an additional $4.7 billion in costs on the company, including a $2.8 billion termination fee payable to Netflix if the existing agreement were abandoned. The directors also argued that the Netflix deal allows shareholders to retain exposure to Discovery Global, which is expected to be spun off into a separately listed company.
Warner formally accepted Netflix’s $82.7 billion stock-and-share offer for its studios and streaming businesses on December 5. Regulatory filings show that advisers had described the bid as a best and final proposal. Netflix’s co-chief executives, Ted Sarandos and Greg Peters, welcomed the decision, saying the Warner board had recognised their offer as delivering the greatest value for shareholders, as well as for consumers and creators across the entertainment industry.
Under the terms of the Paramount bid, Warner shareholders would have received $30 per share for the entire company. David Ellison, Paramount’s chief executive and chairman, has accused Warner of failing to engage meaningfully with his proposals and has insisted that the offer was not final, signalling a willingness to raise the price. Earlier this month, Paramount took its case directly to shareholders by launching a tender offer that is due to expire on January 21.
The takeover battle centres on control of some of the most valuable assets in global entertainment, including the Harry Potter and Game of Thrones franchises, DC Studios, and one of Hollywood’s oldest film studios. For now, Warner’s directors have made clear they believe a narrower deal with Netflix offers a safer and more predictable path forward, even as Paramount continues its push to overturn that judgment.
