Warner Bros. Board Urges Shareholders to Reject Paramount Bid, Endorses Netflix Deal

Warner Bros. Discovery’s (WBD) board of directors on Wednesday unanimously recommended that shareholders reject a hostile takeover bid from Paramount Skydance and its controlling shareholders, the Ellison family, instead favoring Netflix’s earlier acquisition bid.

“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., board chair, in a statement.

WBD informed shareholders that its agreement to sell the Warner Bros. studio, HBO, and HBO Max to Netflix offers “superior” terms compared to the Paramount bid.

Netflix co-CEO Ted Sarandos commented on WBD’s board recommendation, stating that “The Warner Bros. Discovery Board reinforced that Netflix’s merger agreement is superior and that our acquisition is in the best interest of stockholders.” He also described the negotiations as a “competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry.”

Paramount initiated its hostile takeover attempt last week after losing an earlier bidding battle to Netflix, which aims to acquire WBD’s studio and streaming operations for $27.75 per share, valuing the deal at an enterprise value of $82.7 billion and an equity value of $72 billion. Paramount’s competing offer, by contrast, proposed $30 per share for all of WBD, including its television networks, representing an enterprise value of $108.4 billion and an equity value of $77.9 billion.

Supporting its decision to turn down Paramount’s bid, WBD’s board pointed to significant risks associated with the Ellison family’s support, stating in an SEC-filed letter to shareholders that Paramount “consistently misled WBD shareholders that its proposed transaction has a ‘full backstop’ from the Ellison family.”

Paramount’s equity backing includes Middle Eastern investors such as Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company PJSC, and the Qatar Investment Authority. Initially, additional funding had been expected from Affinity Partners, a firm founded by President Trump’s son-in-law, Jared Kushner, but that support has since dropped.

For Paramount’s bid to succeed, it would require approval from both WBD’s board and its shareholders—or it would need to secure at least 90% of outstanding shares.

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