Warner Bros. Discovery (WBD) has decisively rejected a $108 billion hostile takeover bid from David Ellison’s Paramount Skydance. WBD’s board of directors labeled the offer as “illusory” and accused Paramount of misleading shareholders regarding its financing. The media conglomerate reaffirmed its commitment to a previously announced merger agreement with Netflix, which it considers superior.
In a detailed letter to shareholders, WBD’s board emphasized its intent to honor its initial agreement to sell to Netflix. The letter specifically accused Paramount of misleading investors, stating that Paramount “has consistently misled WBD shareholders that its proposed transaction has a ‘full backstop’ from the Ellison family.” WBD’s board unequivocally declared, “It does not, and never has,” regarding the alleged financial guarantee.
The board further asserted that Paramount’s tender offer remains “inferior to the Netflix merger.” They highlighted Netflix’s $27.75-per-share offer for Warner Bros.’ Hollywood studios and streaming business as a “binding agreement with enforceable commitments, with no need for any equity financing and robust debt commitments,” emphasizing its stability and clear financial structure.
Netflix welcomed WBD's decision. Ted Sarandos, Netflix co-CEO, stated in a statement, “The Warner Bros. Discovery board reinforced that Netflix’s merger agreement is superior and that our acquisition is in the best interests of stockholders.”
According to Variety, Paramount and David Ellison’s financial supporters, including his father, tech billionaire Larry Ellison, are expected to review WBD’s rejection and consider whether to increase their offer.
