Warner Bros Discovery Urges Shareholders To Reject Paramount’s Hostile Bid

Warner Bros. Discovery today urged shareholders to reject Paramount‘s hostile $108 billion takeover proposal, saying Netflix‘s previously accepted offer remains superior.

In a 3-page letter, WBD laid out its concerns about a number of aspects of Paramount’s offer. One of its primary issues is the repeated insistence by Paramount that its offer is backstopped by the Ellison family fortune. Larry Ellison, the father of Paramount CEO David Ellison, is a financial backer of the transaction and, as co-founder of tech giant Oracle, one of the Earth’s richest men.

“PSKY’s most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind,” the letter says, referring to Paramount by its ticker symbol. “Instead, they propose that you rely on an unknown and opaque revocable trust for the certainty of this crucial deal funding. Despite having been told repeatedly by WBD how important a full and unconditional financing commitment from the Ellison family was – and despite their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming – the Ellison family has chosen not to backstop the PSKY offer.”

Before the overtures from Paramount, Netflix and Comcast began earlier this year, WBD decided to split itself into two companies, one focused on studio and streaming operations and the other a holding company for cable networks. Plans call for the split to occur by the third quarter of 2026. If Netflix’s bid takes the prize, Discovery Global Networks will spin off and Netflix will acquire Warner Bros.

Along with the rebuff of Paramount, which had been expected, WBD also divulged new details about its M&A quest in a separate SEC filing. That document includes an extensive chronology of the dealings between key stakeholders, revealing interest in the WBD assets from two previously undisclosed companies. Neither is identified in the filings, beyond descriptions of them as “a private holding company and global investment firm” and “an American media company.”

The latter’s founder called in October to express intertest in acquiring Discovery Global Networks and 20% of Studios and Streaming (including HBO Max) for $25 billion in cash.

While reports of other suitors, including Amazon, have swirled in recent months, the main horserace had publicly come down to Netflix, Paramount and Comcast. After Netflix’s offer was accepted, Comcast withdrew.

“Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that
the offer’s value is inadequate, with significant risks and costs imposed on our shareholders,” said
Samuel A. Di Piazza, Jr., Chair of the WBD Board of Directors. “This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals. We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”

Warner’s response to Paramount’s offer, which was received on December 8, is merely the latest step in an incremental process. The ball is now in Paramount’s court, and the company is widely expected to raise its offer to make it impossible for the Warner board to tell shareholders they prefer Netflix.

Regardless of who prevails in the battle for Warner Bros., the deal will go down as one of the priciest media mergers in history and will alter the entertainment landscape. For an industry already reeling from thousands of job losses over the past year at major studios and networks – with even the once-invincible Amazon cutting jobs due to AI – there is a deeply skeptical outlook for the future Warner portfolio. These are assets, don’t forget, that will have been owned by four different companies over the past decade.