WASHINGTON (dpa-AFX) - Warner Bros. Discovery Inc. (WBD) is preparing to once again turn down Paramount Skydance Corp.'s unsolicited tender offer, according to reports from people familiar with the matter. The board has not yet issued a final decision but is scheduled to meet next week to evaluate the proposal. Paramount recently amended its bid, adding a personal guarantee from Larry Ellison to strengthen financing certainty and raising its regulatory termination fee to align with Netflix's competing offer.
Despite these changes, Warner Bros. executives remain skeptical. The company previously rejected Paramount's all-cash offer earlier in December, citing concerns over financing transparency, execution risks, and the absence of a full family guarantee. Analysts note that Paramount's revised terms still do not increase the per-share value, leaving the offer less attractive compared to Netflix's cash-and-stock agreement.
Netflix announced on December 5 that it reached an agreement to acquire Warner Bros.' film studio and streaming assets in a transaction valued at nearly $83 billion. While Paramount's bid carries a higher headline figure, Warner Bros. has emphasized that Netflix's proposal offers greater deal certainty, clearer financing, and fewer regulatory hurdles. Under the Netflix agreement, Warner Bros. would face a $2.8 billion breakup fee if it walked away.
The reports noted that major shareholders, including Harris Oakmark, have also voiced concerns that Paramount's revised offer remains insufficient, particularly when measured against the obligations tied to the Netflix deal.
Paramount Skydance, led by CEO David Ellison, has argued that its bid would create a combined studio larger than Disney and face fewer regulatory obstacles. To bolster confidence, Larry Ellison personally guaranteed more than $40 billion of equity financing, hoping to address doubts about the bid's credibility. The company also extended its tender offer deadline and promised greater flexibility on debt refinancing and interim operating covenants.
For now, Warner Bros. Discovery's board continues to recommend shareholders support the Netflix merger agreement, calling it the superior option for long-term value. While Paramount's persistence underscores the high stakes in Hollywood's largest consolidation battle in decades, industry observers reportedly expect Warner Bros. to remain aligned with Netflix unless Paramount significantly improves its terms.
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