- Warner Bros. Discovery’s (NASDAQ:WBD) board rejected Paramount’s US$108.4B takeover bid, calling it a risky, heavily debt‑financed leveraged buyout
- The board reaffirmed its support for Netflix’s US$82.7B offer, saying it poses fewer closing risks and provides better value for shareholders
- Paramount and Netflix are pursuing different pieces of Warner Bros., with Netflix targeting only the studio/streaming businesses while Paramount seeks the entire company, including CNN and Discovery
- Warner Bros. Discovery stock (NASDAQ:WBD) opened trading at US$28.39
Warner Bros. Discovery’s (NASDAQ:WBD) board of directors has once again rejected a takeover bid from Paramount Skydance (NASDAQ:PSKY), urging shareholders in a Wednesday letter to stand behind a rival offer from Netflix (NASDAQ:NFLX) instead.
In a spicy letter to shareholders, the board characterized Paramount’s revised US$108.4‑billion hostile bid as a high‑risk leveraged buyout that would leave the combined company dangerously overextended. Warner’s directors warned that the proposal was built on “an extraordinary amount of debt financing” and carried “significant closing risks” when compared with Netflix’s more modest — but in their view, more secure — US$82.7‑billion offer.
The two media giants, Paramount and Netflix, have been competing fiercely for control of Warner Bros., home to some of the most valuable entertainment franchises in the world, including Harry Potter, Game of Thrones, Friends and the DC universe. The company also owns an expansive library of classic cinema, from Casablanca to Citizen Kane, making it a rare crown jewel in a consolidating entertainment landscape.
Board warns of record‑setting debt load
Warner’s board reiterated that Paramount’s financing plan would saddle the smaller studio with US$87 billion in debt, an unprecedented figure that would mark the largest leveraged buyout in corporate history. The comments followed the board’s unanimous vote Tuesday to reject Paramount’s latest US$30‑per‑share cash offer.
A detailed 67‑page amended merger filing, released alongside the shareholder letter, outlined the board’s concerns in full, arguing that Paramount’s structure made successful closing “far from certain.”
Netflix co‑CEOs Ted Sarandos and Greg Peters quickly praised Warner’s decision, stating that the board’s stance “recognizes our offer as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators, and the broader entertainment industry.”
Paramount has not yet issued a public response.
Paramount adds guarantees — but concerns persist
Paramount has spent recent weeks attempting to ease investor fears. Late last month, the company secured an “irrevocable personal guarantee” from Oracle founder Larry Ellison — father of Paramount CEO David Ellison — backing US$40.4 billion in equity financing for the acquisition. Paramount also raised its promised regulatory‑block termination payout to US$5.8 billion, matching Netflix’s existing offer.
Despite these assurances, Warner’s leadership has repeatedly rejected Paramount’s overtures, maintaining that Netflix’s approach is both cleaner and less financially precarious.
Different visions for Warner’s future
The competing offers differ not only in structure but in scope. Netflix seeks to acquire Warner’s studio and streaming operations — including HBO, HBO Max, and the company’s film and TV production divisions — but not the entire conglomerate.
Paramount, meanwhile, wants full control of the company, including cable networks such as CNN and Discovery alongside the studios and streaming assets.
The board emphasized that Paramount’s broader acquisition target introduces additional regulatory barriers and operational complexity, increasing the likelihood of a failed deal.
What comes next
With Warner Bros. Discovery’s board firmly aligned behind Netflix, the next move rests with shareholders — and potentially regulators — as the streaming era’s most consequential bidding war continues to intensify.
Both Paramount and Netflix are expected to engage in further lobbying and public messaging as they attempt to win over stakeholders before any formal vote is scheduled.
About Warner Bros. (and their Warner sister, Dot)
Warner Bros. Discovery Inc. values itself around US$50 billion and has a US$57 billion market cap. It is a global media and entertainment company that creates and distributes a portfolio of branded content across television, film, streaming and gaming.
Warner Bros. Discovery stock (NASDAQ:WBD) opened trading 0.28 of a per cent lower at US$28.39 but has risen 182 per cent since this time last year.
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