Warner Bros. Discovery Board Poised to Reject Paramount’s Latest Offer, Stay the Course With Netflix

The board of Warner Bros. Discovery is poised to reject the amended takeover offer fielded by Paramount Skydance last week as David Ellison keeps up his pursuit of the assets he sees as crucial to building a 21st century Hollywood heavyweight.

Bloomberg News reported Tuesday that the WBD board was expected to reject the amended offer that was made with fanfare by Paramount Skydance on Dec. 22. WBD has already struck an agreement to merge with Netflix in a deal valued at more than $80 billion.

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But Paramount Skydance hasn’t given up and is making a tender offer to WBD shareholders. As this tug-of-war has played out in press releases and conference calls and Securities and Exchange Commission filings, WBD shares have soared more than 170% this year, albeit shares were at a low ebb, having traded under $10 for most of 2024. Bloomberg reported the WBD board will meet next week to formally vote on a response to Paramount’s latest offer. A WBD representative declined to comment on matter.

The WBD board’s expected decision is not a surprise given there have been no signs of a significant about-face in the panel’s thinking about which company is the best fit for Warner Bros. and HBO Max. There is also much industry intrigue about how far Paramount is willing to go, if at all, in raising the financial value of its bid higher than the existing $30 a share.

Paramount’s amended offer from last week largely dealt with the financing of the all-cash transaction. Software billionaire Larry Ellison, who is the father of David Ellison, took steps to address the WBD’s stated concerns about the sources of Paramount’s financing. Larry Ellison enlarged his personal stake in the transaction by making an “irrevocable personal guarantee of $40.4 billion” toward Paramount’s $108 billion all-cash offer for all of WBD. That includes CNN, TNT and a handful of other established linear cable channels that are now on track to be spunoff into a separate company next year.

Paramount’s amended offer of Dec. 22 also upped the breakup fee to match Netflix’s $5.8 billion figure, payable to WBD in the event that its deal does not clear regulatory review. Netflix’s deal is valued at just under $83 billion but does not include the linear cable channels. Netflix’s deal is a mix of cash and stock.

If the expected WBD board rejection spurs Paramount to raise its offer, then the ball moves to Netflix’s court. It’s unclear what, if any, willingness Netflix has to raise its hand.