Warner Bros. Discovery's board has officially rejected Paramount Skydance's $108.4 billion hostile takeover bid, calling the offer "illusory" and warning shareholders of serious risks.
The decision comes after Paramount attempted to outbid Netflix for control of Warner Bros' prized assets, including its film and television studios, HBO Max, and major franchises like "Harry Potter."
The Warner Bros. board said Paramount had repeatedly misled them about the financing behind its $30-per-share all-cash offer, CNBC reported.
Paramount claimed the Ellison family fully backed the deal, but the board noted the guarantee never existed.
Instead, the offer relied on a complex, multi-party structure with the Ellison Revocable Trust providing only a portion of the equity, raising concerns about transparency and financial reliability.
Chairman Samuel Di Piazza emphasized the risks of Paramount's proposal. After thoroughly reviewing Paramount's recent tender offer, the Board determined that the proposal falls short in value and could expose shareholders to considerable risks and expenses.
He added that the merger agreement with Netflix represents "superior, more certain value" and praised its clear financing and strong debt commitments.
Paramount CEO David Ellison defended the bid, arguing that an all-cash offer provided more certainty than Netflix's cash-and-stock deal, which fluctuates with the market.
He claimed the proposal offered "superior value and certainty" and a clear path to closing the transaction.
Warner Bros Discovery has rejected a hostile bid from Paramount Skydance. The Warners board argued Paramount's $108.4 billion offer failed to give adequate financing assurances https://t.co/0ODlYYAA7R pic.twitter.com/oWeKK4RLfg
— Reuters (@Reuters) December 17, 2025
Netflix Offer Seen as Safer Choice Than Paramount
However, Warner Bros. questioned Paramount's creditworthiness, pointing out that the studio's $15 billion market capitalization and credit rating barely above junk would leave it highly leveraged with limited cash flow if the deal went through.
According to Reuters, the board also expressed doubts about Paramount's ambitious goal of generating $9 billion in synergies across the studios, cautioning that it could result in additional job cuts and operational constraints while the deal is being finalized.
They pointed out that Netflix's $27.75-per-share offer doesn't rely on extra equity financing and comes with strong debt backing, making it a safer bet for shareholders.
Although Paramount hasn't ruled out making a higher bid down the line, Netflix welcomed the board's recommendation.
Co-CEO Ted Sarandos emphasized that the agreement would benefit not just shareholders, but also creators and consumers.
Co-CEO Greg Peters added that the merger structure is "clean" and "certain," and expressed confidence that any regulatory challenges could be defended.
Originally published on vcpost.com
