In a decisive move, Warner Bros. Discovery (WBD) has formally rejected a hostile takeover bid from Paramount Global, advising its shareholders to do the same. The media giant is standing by its existing plan to sell key studio and streaming assets to Netflix, which its board believes offers superior value and less risk.
The rejection centers on two major issues: value and risk. WBD’s board labeled Paramount’s $30-per-share, all-cash offer as “inadequate” and “illusory,” arguing it imposes significant financial and operational risks. A core point of contention is the financing. WBD disputes Paramount’s claim that the bid is fully guaranteed (“backstopped”) by CEO David Ellison and his father, billionaire Larry Ellison. This funding uncertainty, coupled with scrutiny over Paramount’s involvement of Middle Eastern sovereign wealth funds, has raised national security concerns among lawmakers.
Paramount, for its part, insists its financing is “air-tight” and that the Ellisons’ backing is solid. The company has also stated that its Middle Eastern partners would hold no voting power in a combined entity. Despite WBD’s rejection, Paramount has affirmed its commitment to the current offer.
So, what happens next? Paramount could return with a higher, more securely funded bid to sway WBD’s board. However, their immediate strategy appears to be going directly to WBD shareholders, urging them to tender shares into the existing offer rather than approve the Netflix asset sale. The battle for these entertainment titans is far from over, setting the stage for a potential proxy fight or a revised bid.
