Warner Bros Discovery has officially rejected Paramount Skydance’s massive $108.4 billion hostile takeover bid, stating that the proposal lacked credible financial backing and posed serious risks to shareholders. In a regulatory filing addressed to investors, the company’s board made it clear that Paramount’s offer could not match the certainty, stability, and financial strength presented by Netflix’s competing merger proposal.
According to the board, Paramount repeatedly claimed its $30-per-share cash bid was fully guaranteed by the Ellison family, led by Oracle founder Larry Ellison. However, Warner Bros Discovery said those claims were misleading, noting that the bid was never fully backstopped. The board raised concerns over Paramount’s reliance on the Lawrence J. Ellison Revocable Trust, whose assets and liabilities are not publicly disclosed and could change at any time. The trust was said to cover only a fraction of the required equity while limiting liability, making it an unreliable foundation for a deal of this scale.
Netflix’s binding offer of $27.75 per share was described as significantly safer and more attractive. The Netflix deal includes Warner Bros Discovery’s film and television studios, its extensive content library, and the HBO Max streaming platform. The board highlighted that Netflix’s proposal requires no equity financing and is supported by firm debt commitments, reducing execution risk.
Netflix’s strong balance sheet and market valuation of over $400 billion further strengthened its case. The company has also assured Warner Bros Discovery that it would continue theatrical film releases, addressing concerns that a streaming-led merger could harm cinema distribution. Additionally, Netflix offered a higher breakup fee, signaling stronger deal certainty.
Warner Bros Discovery also cited Paramount’s weaker financial position as a major concern. With a market capitalisation of around $15 billion and a credit rating just above junk status, Paramount would face heavy debt burdens if the deal were completed. The board warned that debt levels could rise sharply, with limited free cash flow to support long-term operations. It also flagged operational restrictions proposed by Paramount that could limit content licensing and result in further job losses across the industry.
The board stated that it engaged extensively with Paramount through meetings and discussions, offering feedback and highlighting shortcomings in multiple bids. Despite these efforts, Paramount failed to present a proposal superior to Netflix’s agreement. After evaluating regulatory, financial, and operational risks, Warner Bros Discovery concluded that accepting Paramount’s bid would expose shareholders to unacceptable uncertainty, solidifying Netflix as the preferred partner in this high-stakes media industry battle.
