Warner Bros-Netflix deal: Company rejects Paramount takeover bid; backs $72-bn Netflix deal for studio and streaming business

Warner Bros. Discovery has once again turned down a takeover offer from Paramount, telling shareholders that the rival bid does not serve their interests and reiterating its recommendation to support a proposed $72 billion transaction with Netflix.

In a statement on Wednesday, the company said its board had reviewed Paramount’s latest proposal and concluded that it “is not in the best interests of the company or its shareholders”, urging investors to stick with the Netflix agreement, AP reported.




“Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed,” Warner Bros. Discovery chair Samuel Di Piazza Jr. said. “Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount’s offer would impose on our shareholders.”

Paramount, controlled by Skydance, has taken its approach directly to shareholders after Warner’s leadership repeatedly rebuffed its overtures. The media group has sweetened its hostile bid to about $77.9 billion for the entire Warner Bros. Discovery company, compared with Netflix’s proposal, which covers only Warner’s studio and streaming assets.

Late last month, Paramount announced an “irrevocable personal guarantee” from Oracle founder Larry Ellison to back $40.4 billion in equity financing for its offer. It also raised the promised payout to Warner shareholders to $5.8 billion if regulators block the deal, matching the break fee proposed by Netflix.

In a letter to shareholders, Warner Bros. Discovery flagged concerns that Paramount’s proposal effectively resembles a leveraged buyout, involving heavy debt and a longer closing timeline of 12 to 18 months, increasing execution risk.

The competing offers also differ sharply in scope. Netflix is seeking Warner’s studio and streaming operations, including legacy film and television production units and platforms such as HBO Max. Paramount, by contrast, is bidding for the entire company, which also includes cable and news networks such as CNN and Discovery.

If the Netflix transaction goes through, Warner’s news and cable businesses would be spun off into a separate company under a previously announced plan.

Any deal involving Warner Bros. Discovery is expected to face intense antitrust scrutiny in the US and overseas, given the size of the companies involved and the potential impact on competition in the global media and streaming industry.