Warner Bros. Discovery Rejects Paramount’s "Illusory" Hostile Bid

Asserts WBD remains committed to its Netflix merger megadeal.

Summary

• Warner Bros. Discovery has formally rejected a $108.4 billion USD hostile bid from Paramount Skydance, opting to stick with a “superior” merger agreement with Netflix
• The WBD board alleged that the Ellison family’s financing lacks a “full backstop,” describing the reliance on a revocable trust as a significant risk compared to Netflix’s $400 billion USD market-cap stability
• Directors also dismissed Paramount’s $9 billion USD synergy targets as operationally ambitious and harmful to the creative industry, while Netflix has committed to maintaining theatrical windows for WBD films

The high-stakes battle for Warner Bros. Discovery (WBD) has reached a boiling point as the company’s board officially urged shareholders to reject Paramount Skydance’s $108.4 billion USD hostile takeover bid. Despite Paramount’s head-turning $30 USD per share all-cash offer, the WBD board has labeled the proposal “inferior” and “illusory,” reaffirming its commitment to a standing merger agreement with Netflix.

The rejection centers on what WBD describes as a lack of financial transparency and certainty. In a scathing letter to stockholders, the board alleged that the Ellison family—led by Oracle co-founder Larry Ellison—has failed to provide a “full backstop” for the financing. In a statement on December 19, WBD said that its board “has unanimously determined that the tender offer launched by Paramount Skydance (‘PSKY’) on December 8, 2025, is not in the best interests of WBD and its shareholders and does not meet the criteria of a ‘Superior Proposal’ under the terms of WBD’s merger agreement with Netflix announced on December 5, 2025.” Instead of a secured guarantee, the bid reportedly relies on an “opaque” revocable trust, which the board claims could be amended or withdrawn at any time. WBD contrasts this with the Netflix deal, valued at $27.75 USD per share, which it praises for its “clean” structure, investment-grade backing, and a significant $5.8 billion USD break-up fee.

Furthermore, WBD took aim at Paramount’s projected $9 billion USD in cost synergies, asserting that such aggressive cuts would “make Hollywood weaker, not stronger.” While Paramount argues its all-cash bid offers better immediate value and a smoother regulatory path, the WBD board remains firm that the Netflix partnership—which includes spinning off WBD’s linear networks into a new entity—is the superior path for long-term growth and industry stability.