Warner Bros. Discovery Dismisses Paramount’s $108B Takeover Attempt
Warner Bros. Discovery has unanimously rejected the revised $108.4 billion hostile takeover offer from Paramount Skydance on Wednesday. The board described the proposal as an overly risky “leveraged buyout”, reaffirming its commitment to a $82.7 billion deal with Netflix.
In a letter addressed to shareholders, the WBD board expressed serious concerns about Paramount’s financial capacity to carry out the acquisition. They pointed out that the $14 billion company would need to raise over $50 billion in debt—almost seven times its market capitalization. This was contrasted with Netflix, which boasts a $400 billion market cap, an investment-grade credit rating, and an estimated free cash flow exceeding $12 billion for 2026.
Paramount’s CEO David Ellison, supported by his billionaire father and Oracle co-founder Larry Ellison, had enhanced the offer with a $40 billion personal guarantee. He also increased the breakup fee to $5.8 billion to match Netflix’s terms. Paramount’s all-cash offer of $30 per share surpassed Netflix’s $27.75 per share cash-and-stock deal.
However, WBD Chairman Samuel Di Piazza stated that Paramount’s proposal “continues to provide insufficient value” and poses “significant costs, risks and uncertainties” compared to the Netflix merger. The board specifically mentioned concerns about operational restrictions that would prevent WBD from spinning off its cable networks into Discovery Global, a separate publicly traded entity planned for late 2026.
Paramount responded on Thursday by reasserting that its offer remains superior. David Ellison pledged continued engagement with shareholders. The bidding war for Warner Bros.’ extensive library, which includes Harry Potter, Game of Thrones, and DC Comics franchises, continues to be one of Hollywood’s most closely watched takeover battles.
Source: CNBC