{"id":196479,"date":"2025-12-17T12:38:07","date_gmt":"2025-12-17T12:38:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/196479\/"},"modified":"2025-12-17T12:38:07","modified_gmt":"2025-12-17T12:38:07","slug":"warner-bros-discovery-rejects-paramount-30-share-acquisition-offer","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/196479\/","title":{"rendered":"Warner Bros. Discovery Rejects Paramount $30\/Share Acquisition Offer"},"content":{"rendered":"

\n\tWarner Bros. Discovery<\/a>\u2018s board has formally said \u201cno thanks\u201d to the $108 billion takeover bid from David Ellison\u2019s Paramount Skydance<\/a> and unanimously reiterated its support for the Netflix deal.<\/p>\n

\n\tParamount and Ellison\u2019s financial backers, which include his father, tech billionaire Larry Ellison, will now evaluate the rejection notice from WBD\u2019s board of directors \u2014 and then decide whether to make a higher offer.<\/p>\n

\n\tWarner Bros. Discovery said it remains committed to its megadeal with Netflix, under which the streamer would buy the Warner Bros. studios, HBO and HBO Max<\/a> for $27.75\/share. That would take place after WBD\u2019s planned Q3 2026 spin-off of Discovery Global, largely comprising the company\u2019s TV networks.<\/p>\n

\n\tWarner Bros. Discovery said Wednesday its board \u201chas unanimously determined that the tender offer launched by Paramount Skydance (\u2018PSKY\u2019) on December 8, 2025, is not in the best interests of WBD and its shareholders and does not meet the criteria of a \u2018Superior Proposal\u2019 under the terms of WBD\u2019s merger agreement with Netflix announced on December 5, 2025.\u201d The Warner Bros. Discovery board \u201crecommends that WBD shareholders reject PSKY\u2019s offer.\u201d<\/p>\n

\n\t\u201cThe terms of the Netflix merger are superior. The PSKY offer provides inadequate value and imposes numerous, significant risks and costs on WBD,\u201d Warner Bros. Discovery\u2019s board says in a letter to shareholders (read it in full below). The company also documents the sequence of interactions with Paramount in a Schedule 14D-9 filing Wednesday with the SEC<\/a>.<\/p>\n

\n\tAccording to the WBD board\u2019s letter, Paramount \u201chas consistently misled WBD shareholders that its proposed transaction has a \u2018full backstop\u2019 from the Ellison family. It does not, and never has.\u201d<\/p>\n

\n\tPer the Warner Bros. Discovery board, the most recent Paramount Skydance proposal includes a $40.65 billion equity commitment \u201cfor which there is no Ellison family commitment of any kind. Instead, they propose that you rely on an unknown and opaque revocable trust for the certainty of this crucial deal funding.\u201d <\/p>\n

\n\tThe WBD board letter continues: \u201cDespite having been told repeatedly by WBD how important a full and unconditional financing commitment from the Ellison family was \u2014 and despite their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming \u2014 the Ellison family has chosen not to backstop the PSKY offer.\u201d Warner Bros.\u2019s board said a revocable trust is \u201cno replacement for a secured commitment by a controlling stockholder\u201d because the assets and liabilities of the trust are not publicly disclosed and are subject to change.<\/p>\n

\n\tFurthermore, according to the WBD letter, Paramount\u2019s acquisition offer \u201ccan be terminated or amended by PSKY at any time prior to its completion\u201d and is therefore not the same thing as a binding merger agreement.<\/p>\n

\n\t\u201cThe PSKY offer is illusory,\u201d the letter says.<\/p>\n

\n\tAdditionally, the Warner Bros. Discovery board commented on Paramount\u2019s expectation that it can achieve $9 billion in cost synergies ($3 billion from Paramount-Skydance and $6 billion with WBD). \u201cThese targets are both ambitious from an operational perspective and would make Hollywood weaker, not stronger,\u201d WBD board\u2019s says. Netflix has identified $2 billion-$3 billion in expected cost synergies<\/a>.<\/p>\n

\n\tWarner Bros. Discovery chair Samuel Di Piazza Jr. said in a statement: \u201cFollowing a careful evaluation of Paramount\u2019s recently launched tender offer, the Board concluded that the offer\u2019s value is inadequate, with significant risks and costs imposed on our shareholders. 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.\u201d<\/p>\n

\n\tRELATED: David Ellison Courted Warner Bros. Discovery\u2019s Zaslav Hard Over 12 Weeks to Win a Deal. Then WBD\u2019s Chief Stopped Responding to His Texts<\/a><\/p>\n

\n\tOn Wednesday, Netflix released a statement saying it \u201cwelcomes\u201d the WBD board\u2019s recommendation. It also pointed to its website, netflixwbtogether.com<\/a>, touting the benefits of its deal with Warner Bros.<\/p>\n

\n\t\u201cThe Warner Bros. Discovery Board reinforced that Netflix\u2019s merger agreement is superior and that our acquisition is in the best interest of stockholders,\u201d said Ted Sarandos, Netflix co-CEO, in a statement. \u201cThis was a competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry.\u201d Netflix co-CEO Greg Peters added: \u201cBy acquiring Warner Bros., we\u2019ll be able to offer audiences and creators around the world even more choice, value and opportunity. This transaction is fundamentally pro-consumer, pro-innovation, pro-creator and pro-growth.\u201d<\/p>\n

\n\tOver the course of 12 weeks, Ellison had proffered an increasingly aggressive series of bids for Warner Bros. Discovery<\/a> in its entirety, starting at $19\/share Sept. 14 and most recently offering $30\/share as of Dec. 4. After WBD picked Netflix as the winning bidder, Ellison on Dec. 8 launched a hostile takeover maneuver<\/a>, announcing that Skydance was taking its offer for all of Warner Bros. Discovery directly to shareholders<\/a>.<\/p>\n

\n\tIn prior communications to the Paramount team, WBD\u2019s board had expressed concerns that Paramount\u2019s Dec. 1 bid \u2014 backed by the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi<\/a>, as first reported<\/a> by Variety \u2014 would trigger a problematic national security review by the U.S. government because of the foreign investors. Paramount Skydance\u2019s bid also was being backed by Affinity Partners, the investment firm founded by Jared Kushner, who is Donald Trump\u2019s son-in-law. To address these concerns, Paramount disclosed in an SEC filing, the three Arab wealth funds and Kushner\u2019s Affinity \u201cagreed to forgo any governance rights \u2014 including board representation \u2014 associated with their non-voting equity investments.\u201d On Tuesday, Kushner\u2019s Affinity Partners said it was no longer participating in Paramount\u2019s hostile takeover bid for WBD<\/a>.<\/p>\n

\n\tParamount claimed that if the Middle Eastern wealth funds dropped out, the Ellison family and RedBird Capital Partners would \u201cbackstop the full amount of the equity financing\u201d of its bid. As of Dec. 16, Larry Ellison\u2019s net worth was approximately $240 billion, per Forbes. As noted in the WBD shareholder letter, Paramount\u2019s equity financing commitment is backed by the Lawrence J. Ellison Revocable Trust.<\/p>\n

\n\tMore broadly, Paramount has argued that its $30\/share offer is a better deal for WBD shareholders than Netflix\u2019s starting with the fact that it\u2019s all-cash, compared with Netflix\u2019s agreement that is 84% cash.<\/p>\n

\n\tParamount also has asserted that a Paramount-WBD merger would have a clearer path to regulatory approval compared with Netflix, which would amass even more power in the premium video streaming market through the takeover of HBO Max. According to the letter to WBD\u2019s board to shareholders, \u201cDespite PSKY\u2019s media statements to the contrary, the Board does not believe there is a material difference in regulatory risk between the PSKY offer and the Netflix merger.\u201d<\/p>\n

\n\tFor their part, Netflix execs have expressed confidence they will obtain all necessary approvals<\/a> to close the deal. <\/p>\n

\n\tAccording to Paramount, WBD is overvaluing the TV networks group<\/a> (which is excluded from the Netflix deal). Because WBD went with Netflix\u2019s bid, that implies WBD is ascribing a value of at least $2.25\/share to the TV networks group. But Paramount argues that the value of WBD\u2019s networks group is in fact much lower: roughly $1\/share, working out to an equity valuation of about $2.6 billion, assuming the spun-off entity will have a 3.5x net debt-to-EBITDA ratio. However, at a lower leverage ratio, Discovery Global would have a higher market value \u2014 to the point where the Netflix terms plus the Discovery Global valuation would exceed $30\/share, according to an analysis by Wall Street firm MoffettNathanson.<\/p>\n

\n\tPresident Trump, meanwhile, has said he will be \u201cinvolved\u201d in a Warner Bros. deal review. Trump, who has been palsy with the Ellisons, has in recent weeks lashed out at them over his perceived mistreatment by CBS News\u2019 \u201c60 Minutes\u201d<\/a> and wrote in a Dec. 15 social-media post, \u201cIf they are friends, I\u2019d hate to see my enemies!\u201d<\/p>\n

\n\tRead Warner Bros. Discovery\u2019s letter to shareholders explaining its rejection of the Paramount Skydance offer:<\/p>\n

\n\tDear Fellow Shareholders,<\/p>\n

\n\tAs your Board of Directors, we are committed to acting in your best interest. In this spirit, in October, we launched a public review of strategic alternatives to maximize shareholder value. This followed three separate proposals from Paramount Skydance (\u201cPSKY\u201d), as well as interest from multiple other parties.<\/p>\n

\n\tThat thorough process, overseen by the Board with the assistance of independent financial and legal advisors, as well as our management team, led to the company entering into a merger agreement with Netflix on December 4, with the substantial benefits to WBD shareholders described below. Having failed to submit the best proposal for you, our shareholders, PSKY launched an offer nearly identical to its most recently rejected proposal.<\/p>\n

\n\tAs a Board, we have now conducted another review and determined that PSKY\u2019s tender offer remains inferior to the Netflix merger. The Board continues to unanimously recommend the Netflix merger, and that you reject the PSKY offer and not tender your shares.<\/p>\n

\n\tBelow, and in more detail in our 14D-9 filing, we highlight the many reasons for the Board\u2019s determination. None of these reasons will be a surprise to PSKY given our clear, and oft- repeated, feedback on their six prior proposals.<\/p>\n

\n\tThe terms of the Netflix merger are superior. The PSKY offer provides inadequate value and imposes numerous, significant risks and costs on WBD.<\/p>\n

\n\tThe value we have secured for shareholders through the Netflix merger is extraordinary by any measure.<\/p>\n

\n\tOur agreement with Netflix gives WBD shareholders $23.25 in cash, plus $4.50 in shares of Netflix common stock (based on a collar range of $97.91 \u2013 $119.67 in the Netflix stock price at the Ume of closing), plus the additional value of the shares of Discovery Global and the opportunity to participate in future potential upside following Discovery Global\u2019s separation from WBD. The entire Board is confident in our recommendation that Netflix represents the best value-creating path for shareholders.<\/p>\n

\n\tPSKY has consistently misled WBD shareholders that its proposed transaction has a \u201cfull backstop\u201d from the Ellison family. It does not, and never has.<\/p>\n

\n\tPSKY\u2019s most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind. 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 \u2013 and despite their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming \u2013 the Ellison family has chosen not to backstop the PSKY offer.<\/p>\n

\n\tAnd a revocable trust is no replacement for a secured commitment by a controlling stockholder. The assets and liabilities of the trust are not publicly disclosed and are subject to change. As the name indicates, revocable trusts typically have provisions allowing for assets to be moved at any time. And the documents provided by PSKY for this conditional commitment contain gaps, loopholes and limitations that put you, our shareholders, and our company at risk.<\/p>\n

\n\tAmplifying the concerns about the credibility of the equity commitment being offered by PSKY, the revocable trust and PSKY have agreed that the trust\u2019s liability for damages, even in the case of a willful breach, would be capped at 7% of its commitment ($2.8 billion on a $108.4 billion transaction). Of course, the damage to WBD and its stockholders were the trust or PSKY to breach their obligations to close a transaction would likely be many multiples of this amount.<\/p>\n

\n\tWBD\u2019s merger agreement with Netflix is a binding agreement with enforceable commitments, with no need for any equity financing and robust debt commitments. The Netflix merger is fully backed by a public company with a market cap in excess of $400 billion with an investment grade balance sheet. The debt financing for the PSKY bid relies on an unsecure revocable trust commitment as well as the credit worthiness of a $15 billion market cap company with a credit rating at or only a notch above \u201cjunk\u201d status from the two leading rating agencies. The financial condition and creditworthiness of PSKY, which, if its proposed transaction were to close, would have a high gross leverage ratio of 6.8x 2026E debt to EBITDA with virtually no current free cash flow generation before synergies, raise substantial risks for its acquisition of WBD. Such debt levels reflect a risky capital structure that is vulnerable to even potentially small changes in the PSKY or WBD business between signing and closing.<\/p>\n

\n\tAdditionally, PSKY contemplates $9 billion in synergies from the mergers of Paramount\/Skydance and their offer for WBD. These targets are both ambitious from an operational perspective and would make Hollywood weaker, not stronger.<\/p>\n

\n\tThe Board\u2019s review was full, transparent and competitive \u2013 establishing a level playing field that fostered a rigorous and fair process.<\/p>\n

\n\tThe Board repeatedly engaged with all parties, including extensive engagement with PSKY and its advisors over the course of nearly three months. We held dozens of calls and meetings with its principals and advisors including four in-person meetings and meals between David Zaslav and David and\/or Larry Ellison and provided multiple opportunities for PSKY to offer a proposal that was superior to those of the other bidders, which PSKY never did.<\/p>\n

\n\tAfter each bid, we informed PSKY of the material deficiencies and offered potential solutions. Despite this feedback, PSKY has never submitted a proposal that is superior to the Netflix merger agreement.<\/p>\n

\n\tDespite PSKY\u2019s media statements to the contrary, the Board does not believe there is a material difference in regulatory risk between the PSKY offer and the Netflix merger.<\/p>\n

\n\tThe Board carefully considered the federal, state, and international regulatory risks for both the Netflix merger and the PSKY offer with its regulatory advisors. The Board believes that each transaction is capable of obtaining the necessary U.S. and foreign regulatory approvals and that any difference between the respective regulatory risk levels is not material. The Board also notes that Netflix has agreed to a record-setting regulatory termination cash fee of $5.8 billion, significantly higher than PSKY\u2019s $5 billion break fee.<\/p>\n

\n\tThe PSKY offer is illusory.<\/p>\n

\n\tThe offer can be terminated or amended by PSKY at any time prior to its completion; it is not the same thing as a binding merger agreement. The first paragraph of the offer states it is \u201csubject to the conditions set forth in this offer to purchase (as it may be amended or supplemented from time to time)\u201d and continues on the next page, \u201cwe reserve the right to amend the Offer in any respect (including amending the Offer Price)\u201d. In addition, the offer is not capable of being completed by its current expiration date, due to the need for, among other things, global regulatory approvals, which PSKY indicates may take 12-18 months. Nothing in this structure offers WBD shareholders any deal certainty.<\/p>\n

\n\tThe PSKY offer provides an untenable degree of risk and potential downside for WBD shareholders.<\/p>\n

\n\tThere will be additional costs associated with PSKY\u2019s offer that could impact shareholders.<\/p>\n

\n\tWhen considering the PSKY offer at this juncture, it is important to note that its acceptance could incur significant additional costs to shareholders \u2013 all of which PSKY has ignored in their communications. WBD would have to pay Netflix a $2.8 billion termination fee, which PSKY has not offered to reimburse. In addition, WBD would incur approximately $1.5 billion in financing costs if we do not complete our planned debt exchange as agreed to with certain of our debtholders, which would not be permitted by the PSKY offer. This additional $4.3 billion in potential costs represents approximately $1.66 per share to be borne by WBD shareholders if the offer does not close.<\/p>\n

\n\tWe look forward to moving ahead with our combination with Netflix and delivering the compelling and certain value it will create for shareholders. We urge you to carefully read the 14D-9 filed with the SEC this morning and available on our website, which more fully details the strategic review process and the Board\u2019s reasons for its recommendation to you.<\/p>\n

\n\tSincerely,<\/p>\n

\n\tThe Warner Bros. Discovery Board of Directors<\/p>\n","protected":false},"excerpt":{"rendered":"Warner Bros. Discovery\u2018s board has formally said \u201cno thanks\u201d to the $108 billion takeover bid from David Ellison\u2019s…\n","protected":false},"author":2,"featured_media":172236,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[93,61,60,65249,282,12481],"class_list":{"0":"post-196479","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-tv","8":"tag-entertainment","9":"tag-ie","10":"tag-ireland","11":"tag-paramount-skydance","12":"tag-tv","13":"tag-warner-bros-discovery"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/196479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=196479"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/196479\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/172236"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=196479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=196479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=196479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}