WBD board tells shareholders to reject Paramount Skydance takeover offer

Warner Bros. Discovery Board Rejects Paramount’s Hostile Takeover Bid

The Warner Bros. Discovery board has unanimously recommended that shareholders reject a takeover offer from Paramount Skydance, opting instead for a “superior” proposal from Netflix. The decision comes after Paramount launched a hostile bid for WBD, offering $30 per share in an all-cash deal that values the company at $108.4 billion. However, the WBD board has expressed concerns over the financing of the offer, which includes more than $40 billion from sources outside of the Ellison family.

Financing Concerns and Regulatory Approval

Paramount Skydance CEO David Ellison has argued that the deal would have better chances of winning regulatory approval, but the WBD board remains skeptical. The board has noted that the Paramount bid includes significant risks and costs for shareholders, and that the financing is not fully backed by the Ellison family. In a statement, WBD board chair Samuel Di Piazza expressed confidence in the Netflix proposal, citing its “certainty of close” and “high termination fee” as key advantages.

Netflix has proposed a cash-and-stock transaction for WBD’s streaming and studio assets, worth an equity value of $72 billion or enterprise value of roughly $83 billion, including debt. The deal would see Warner Bros. Discovery’s portfolio of cable networks spun out into a separate entity. Di Piazza has praised the Netflix offer, saying it “responded to the operating issues that we were concerned about” and provided a “compelling” alternative to the Paramount bid.

Antitrust Questions and Shareholder Vote

Despite concerns over antitrust regulation, Di Piazza has expressed confidence that both deals could be approved, saying “either of these deals can get done” and that both would need to “fight their way through the [Department of Justice].” A shareholder vote on the Netflix proposal is expected to take place in the spring or early summer, although a date has not been set. Netflix co-CEO Ted Sarandos has welcomed the WBD board’s recommendation, saying the deal would deliver “the best outcome for consumers, creators, stockholders and the broader entertainment industry.”

Netflix co-CEO Greg Peters has also dismissed antitrust questions, saying the company’s deal structure is “clean” and “certain,” and that the audiences for Netflix and HBO Max streaming services are complementary. Peters has expressed confidence in the company’s ability to defend the deal in court, saying “we have a good case, and we believe that we should defend that case and make that case strongly.” As the situation continues to unfold, investors and industry watchers will be closely monitoring the next moves from both Paramount and Netflix.