Warner Bros. Discovery Board Rejects Paramount's Amended Offer, Reaffirms Netflix Merger

Warner Bros. Discovery's board of directors has unanimously rejected Paramount Skydance's amended hostile takeover bid, reaffirming its commitment to a merger agreement with Netflix.

The board expressed concerns over the significant debt financing involved in Paramount's proposal, stating it creates risks to closing and lacks protections for shareholders if the transaction is not completed.

In contrast, the board highlighted that the agreement with Netflix offers superior value with greater certainty, without the significant risks and costs Paramount's offer would impose on shareholders.

Netflix's proposed acquisition includes Warner's studio and streaming business, encompassing platforms like HBO Max, while excluding cable networks such as CNN.

Paramount's offer, which includes an equity commitment backed by Oracle co-founder Larry Ellison, was deemed insufficient by the board.

The board also noted that Paramount's offer relies on an opaque revocable trust for financing, which is no replacement for a secured commitment by a controlling shareholder.

Netflix co-CEOs Ted Sarandos and Greg Peters welcomed the board's decision, stating that the merger agreement is superior and will deliver the greatest value to stockholders, as well as consumers, creators, and the broader entertainment industry.

Paramount has not immediately responded to the board's decision.