Warner Bros. Discovery has formally urged shareholders to reject Paramount’s hostile $108 billion takeover proposal, arguing the bid carries major financial risks and lacks deal certainty compared to its accepted merger agreement with Netflix.
In a three-page letter sent to investors, WBD said Paramount’s offer fails to qualify as a “superior proposal” and should be rejected in favor of Netflix’s deal.
WBD Questions Paramount’s Financing
A central concern raised by WBD is Paramount’s claim that its bid is effectively backstopped by the Ellison family. While Larry Ellison is one of the world’s wealthiest individuals and a financial backer of Paramount CEO David Ellison, WBD says there is no binding Ellison family commitment supporting the transaction.
According to the letter, Paramount’s proposal relies on a revocable trust that WBD describes as opaque and filled with gaps, loopholes, and limitations.
The board warned that this structure exposes shareholders to unnecessary risk and provides no firm assurance that funding would be available if financing were to fall apart.
Board Calls Offer “Illusory”
WBD also criticized the structure of Paramount’s bid, noting that it allows Paramount to amend or terminate the offer, including changes to the price.
With global regulatory approvals expected to take 12 to 18 months, the board said the proposal offers little deal certainty.
“The offer’s value is inadequate, with significant risks and costs imposed on our shareholders,” said WBD board chair Samuel A. Di Piazza Jr., adding that the proposal once again failed to address concerns previously raised during multiple rounds of talks.
Netflix Deal Reaffirmed As Superior
Alongside rejecting Paramount’s bid, WBD reiterated its support for its merger agreement with Netflix, which the board described as offering more certain value, stronger financing, and a clearer regulatory path.
Netflix co-CEOs Ted Sarandos and Greg Peters also sent a letter to WBD shareholders reaffirming confidence in their $82.7 billion offer. Sarandos said Netflix plans to preserve Warner Bros.’ theatrical releases and maintain HBO’s focus on prestige television.
