Warner Bros. Discovery’s board unanimously rejected Paramount Skydance’s $108.4 billion hostile takeover attempt on Wednesday. The directors declared the $30-per-share cash offer inferior and risky compared to their binding agreement with Netflix.
Shareholders might feel like they’re watching a bidding war from the comfort of their couches, but with real money on the line. Netflix’s $27.75-per-share deal for the studios, library, and HBO Max comes with solid financing and no equity headaches, leaving Paramount’s proposal looking like a promising trailer that falls flat in execution.
The board’s pointed letter highlighted how Paramount had assured everyone of a full guarantee from the Ellison family. Yet that promise evaporated faster than a plot hole in a rushed screenplay, replaced by commitments from a revocable trust whose contents can shift like streaming algorithms.
Paramount went straight to shareholders last week, touting airtight financing with billions from RedBird Capital and debt from major banks.
Warner Bros. countered that the latest offer lacked any direct Ellison family pledge. Instead, it relied on an opaque trust backed by Oracle shares worth plenty—until someone decides otherwise.
The board noted the seven-party structure added layers of conditions. One observer might wonder if tying up that much cash feels like betting the house on a single blockbuster.
Paramount has submitted six bids total, each aiming to keep the entire company intact, including CNN and TNT Sports.
The company argued its trust held over $250 billion in assets, more than enough to cover commitments.
Warner Bros. remained unconvinced, pointing out the trust’s flexibility and capped liability at $2.8 billion for part of the equity.
Netflix co-CEO Ted Sarandos welcomed the decision, noting the board affirmed their deal’s superiority.
A shareholder vote on the Netflix merger looms in spring or early summer.
Shares reacted modestly: Warner Bros. dipped 1.4% in premarket, Netflix rose 1.5%, and Paramount slipped 1.8%.
The board dismissed suggestions of fraud risks as absurd, while quietly emphasizing Netflix’s robust debt commitments and lack of financing contingencies.
Paramount insisted its debt terms stood firm regardless of credit ratings.
Warner Bros. saw things differently, flagging potential vulnerabilities in the complex setup.
In the end, the directors concluded sticking with Netflix offered clearer value and fewer plot complications.
Hollywood watchers await whether Paramount returns with revisions or lets this chapter close.
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